Camels+t approach for banks’ assessment: evidence from the Baltics

The findings of the research contribute towards commercial banks’ soundness assessment. The current study focuses on the importance of customers’ trust for banks’ soundness and the expanded CAMELS+T model was suggested where “T” stands for customer trust. For testing CAMELS+T model expert evaluation method was used Pairwise comparison method was used for factors’ ranking. The outcomes of the experts’ pairwise comparison were generated using analytic hierarchy process (AHP) based on classical and balanced scales and fuzzy analytic hierarchy process (FAHP) technique. The model was tested in the Baltic countries. Three forms of banking were analysed: traditional banking, internet banking and mobile banking in the current research. The results of the study showed that customer trust is one of the vital factors positively influencing the soundness of commercial banks. Therefore, the results contribute to the studies relating bank performance, as it confirms that trust is a powerful tool in commercial banks’ soundness building process. The results of the research are useful for commercial banks’ soundness’ assessment as soundness is considered the factor that is necessary not only for customer retention but also for customer acquisition. The findings have implications on the development of the strategy and the policy of commercial banks. Moreover, the results are valuable for investors as the soundness of commercial bank is the criterion investors should take into consideration while choosing a bank they are going to work with.