The banking sector has embraced the use of technology to serve its client’s faster and also to do more with less. Emerging technologies have changed the banking industry from paper and branch based banks to “digitized and networked banking services”. Unlike before, broadband internet is cheap and it makes the transfer of data easy and first. Technology has changed the accounting and management system of all banks.
And it is now changing the way how banks are delivering services to their customers. However this technology comes at a cost, implementing all this technology has been expensive but the rewards are limitless. The banking sector was one of the first to embrace rapid globalization and benefit significantly from IT development. The technological revolution In banking started In the sass, with the Installation of the first automated bookkeeping machines at banks.
Among the local banks, the BPCS are ahead of the NCSC In pornographically driven banking services. A Limited number of technology derisiveness are being provided by the private Islamic banks in Bangladesh. For sending foreign remittance NCSC and some BPCS are working collaboratively with mobile phone service operators. Application of computer based services in Bangladesh: Electronic Fund Transfer (FEET), SWIFT and MICRO queue are being provided by all the banks. All the banks except Attar Bank are providing any branch banking to the customers. All banks have debit card facilities for their clients except Cit Bank AN.
First Security Islam Bank Limited, Attar Bank Limited and Cit Bank AN have no own ATM booth. First Security Islam Bankrolled Is going to establish their own ATM booth. They have already selected the palace for 100 ATM booth and expect to launch Figure 1 shows the percentage of banks providing different technology driven services. Tablet : Ranking of services Rank Services Percentage of Banks providing the services Electronic Fund Transfer (FEET), SWIFT,MICRO queue 100% 2. Debit card and Any branch banking 97. 37% 3. ATM (own) 92. 11% 4. Core banking 78. 95% 5. Point of sale (POS) 73. 69% 6. Credit cards 65. 79% 7.
SMS service 3. 16% count. Of Table 1 8. Internet banking 9. 39. 47% 10. Banking KIOSK 7. 90% 11. Open online Letter of Credit 0. 00% Applications of computer in different type of banking: 1. Personal banking: Personal banking refers to a person being able to access their banking information from a “personal computer”. It has become a popular method for people to manage money and pay bills using online servers to log in to their account and pay bills, transfer money between accounts and reconcile queue ledgers. Uses: Bill payments & wire transfers to third parties. Fund transfer between customer’s transactional & savings account.
Sale & purchase of investments. Analyzing recent transactions. TELLER MACHINE) 2. Internet Banking: E-banking, or electronic banking, refers to all types of banking transactions performed electronically, without visiting a brick-and-mortar bank. Terms such as PC banking, Internet banking or online banking are sometimes used instead Internet banking provides bank customers the option of performing banking transactions online through a bank-authorized website. The customer is given a user identification code and password from the bank to log in and perform a range of services.
The actual Web-based interface is connected with the main computer through a Web server which collects and disseminates all transactions and updates main account records. Computers which process Internet transactions are required to have certified physical, transaction and firewall security approved by State and Federal follow De-centralized method to control their activities done through different branches. Uses: For customers, this means performing actions such as : paying bills, checking balances on their accounts, transferring funds and purchasing financial instruments remotely, using a personal computer. G. : Credit card Debit card E-queue FEET(Electronic fund transfer) EDEMA accounts EDI(Electronic data interchange) 3. Mobile banking: Mobile banking refers to provision and available of banking and financial services with the help of mobile tell -communication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information. Benefits: With mobile banking connectivity is not a problem . NNE can find mobile connectivity in the remotest of places also where having an internet connection is a problem.
Mobile banking through cell phone is user friendly Cell phone banking is cost effective . Various banks provide this facility at a lower cost. E. G. Balance checking in the account Recent transactions Access to loan statements Recently, the introduction of mobile banking by Trust Bank, Dutch Bangkok, BRACE Bank and some other Private Commercial Banks in Openhandedness a new window. In 2010, the talebearer of mobile subscribers was 68. 6 million and in 2011, the total number of subscriber was 85. 0 million. The annual growth rate was 31% in 2010 and% in 2011. Among the mobile subscriber only% have bank account.
Soother is a great opportunity for the bankers to make a good amount of profit providing the service of mobile banking. To the railway path that covered most of the important parts Bangladesh. This optical fiber network can be used as the backbone. For example, mobile penetrations such as Grahame Phone Limited uses this optical fiber noteworthiness which they reach even in rural areas with their services. It is encouraging that some of the Fibs and BPCS are already used this optically network for conducting online transactions, ATM and POS services. Major advantages accruing areas:
The advantages accruing from computerizing are three-directional – to the customer, to the bank and to the employee. For the customer: Banks are aware of customer’s need for new services and plan to make them available. IT has increased the level of competition and forced them to integrate the new technologies in order to satisfy their customers. They have already developed and implemented a certain number of solutions among them: Self-inquiry facility: Facility for logging into specified self-inquiry terminals at the branch to inquire and view the transactions in the account.
Remote banking: Remote terminals at the customer site connected to the respective branch through a modem, enabling the customer to make inquiries regarding his accounts, on-line, without having to move from his office. Anytime bioengineering banking: Installation of Tams which offer non-stop cash withdrawal, remittances and inquiry facilities. Networking of computerized branches inter-city and intra-city, will permit customers of these branches, when interconnected, to transact from any of these branches.
Telecasting: A 24-hour service through which inquiries regarding balances and transactions in the account can be made over the phone. Electronic Banking: This enables the bank to provide corporate or high value customers with a Graphical User Interface (GU’) software on a PC, to inquire about their financial transactions and accounts, cash transfers, queue book issue and inquiry on rates without visiting the bank. Moreover, LLC text and details on bills can be sent by the customer, and the bank can download the same. The technology used to provide this service is called electronic data interchange (DE’).
It is used to transmit business transactions in computer-readable form between organizations and individuals in a standard format. For the bank: During the last decade, banks applied IT to a wide range of back and front office tasks in addition to a great number of new products. The major advantages for the bank to implement IT are: development and follow-up. Immediate replies to customer queries without reference to ledger-keeper as terminals are provided to Managers and Chief Managers. Automatic and prompt carrying out of standing instructions on due date and generation of reports.
Generation of various MIS reports and periodical returns on due dates. Fast and up-to-date information transfer enabling speedier decisions, y interconnecting computerized branches and controlling offices. For the employees: IT has increased their productivity through the followings: Accurate computing of cumbersome and time-consuming Jobs such as balancing and interest calculations on due dates. Automatic printing of covering schedules, deposit receipts, pass book / pass sheet, freeing the staff from performing these time- consuming Jobs, and enabling them to give more attention to the needs of the customer.
Signature retrieval facility, assisting in verification of transactions, sitting at their own terminal. Avoidance of duplication of entries due to existence of single- point data entry. Use of Computers in Banks: Computers are used in banks for a variety of reasons. They help bank personnel operate more efficiently and effectively. Computers are used to track certain transactions and they help process other customer information as well. Without computers, it would be very hard for a bank to offer good customer service day in and day out.
Computers help a bank save time and money, and can be used as an aid to generate profits. Customer Information: Banks use computers to track customer information such as name, address, phone umber, date of birth, Social Security number and place of employment. This information is used to stay in touch with customers and notify them of any changes in bank policy. A customer address is needed to send out statements on a monthly basis. A customer’s account number is also stored in the computer, which gives bank employees the ability to access customer information efficiently.
Products: The number of products and services a customer has is also stored in computers. Bank personnel will periodically call customers at home to offer them a product or service, such as a home equity line of credit. It helps to know which products a customer already has before any new products are offered. Without the use of computers, it would be difficult to keep track of this information. Reports and Profits: With a computer, banks can analyze aging reports and track the customers who have had checks returned due to insufficient funds.
This report can be used by the sales associates to call these customers and offer them a product called overdraft protection, which prevents a customer from over drafting their account. Computers help bank personnel generate income by targeting certain customers for sales activity. Transactions and Goals: make deposits and withdrawals, cash checks, open checking accounts or apply for mortgage loans, a computer will store and track all of the information once a teller or bank employee keys it into the system.
After tabulating all of the information, a branch manager can print the report at the end of the day to see if the branch hits its goals and objectives. Branches have goals for lending and new accounts. Credit Applications: A bank can use computers for new loan applications and credit card applications; Ecosystems verification; and opening new accounts such as checking, savings or artifice of deposit accounts. Delinquency: Computers can be used to track customers who are delinquent on their loan and credit card payments.
Computers can generate separate reports for customers who are 30-, 60- and 90-days delinquent on their accounts. When a 30-day delinquency report is generated, a collection representative can contact the customer for resolution, which helps keep delinquency under control. Miscellaneous: Computers can keep a record of all communications that a bank employee may have with a bank customer including collection activity. A bank can also use a computer to e which safety deposit boxes are available and they can keep a record of customers who have safety deposit boxes.
Impact of computer on privacy and confidentiality of data: Exposure to Theft: “Pushing” scams and sophisticated computer hackers have put a new threat towards online wealth management. A popular device from would-be thieves is to send Internet banking customers emails that are strikingly similar in style to the banks masthead, complete with official logos. These emails as customers to “verify their account” by sending account information, PIN numbers, Social Security numbers or NY other information that can allow a thief to gain access to funds.
Most online banks will offer advice and education on how to recognize and avoid these scams. Viruses and Spare: Viruses can compromise the integrity of any information stored on the computer, including passwords and user names. In fact, some of them are designed specifically to do this. Banks use anti-virus software, widely available in many electronic stores, to protect computer and avoid visiting websites not trusted. Spare, a type of software which monitors computers and logs. Anti-spare programs such as Spot Search and Destroy can fight these programs.
Firewalls can be one way of protecting computers. Risks of using computer in bank: The speed of technological innovation in computers and telecommunications in recent years and the integration of automated operations are increasing the dependence of characterize an EDP environment and the security and control procedures it requires deserve the full attention of supervisors. This note addresses the following types of risks: Improper disclosure of information: Most bank information is created by or directly linked to computer processing.
Data and documents are routinely transmitted throughout a bank or between a bank and TTS correspondents and clients via public telecommunication links. Much of that information is confidential and could damage customer relations and the reputation of the bank. The particular danger of unauthorized disclosure of confidential information in EDP systems, compared with manual systems, lies in the fact that much larger quantities of information can be removed in a more convenient and process able form (e. . Copies on tapes or disks) and there may be no trace of unauthorized access having occurred. Errors: Errors typically and frequently occur during the entry of data and during the placement and amendment of programs. Significant errors can also arise during the system design process, during routine systems “housekeeping” procedures and when using special programs to correct other errors. Fraud: The wide variety of ways that computer records can be accessed creates many possibilities for fraud.
For example: unauthorized transactions can be entered into the computer system; unauthorized changes to programs can be made during routine development remittance which may cause the program to generate fraudulent transactions automatically, to ignore control checks on selected accounts or to remove records of pacified transactions; special programs can be used to make unauthorized changes to computer records in a way that bypasses the normal control and audit trail facilities built into the computer system. Insist of large numbers of individual equipment and cooperativeness’s, the failure of any one of which may bring down the system. Often discontentment are concentrated in one or a few places increasing the vulnerability to accidents. Ineffective planning: Sound planning is a crucial factor. Banking efficiency and quality of service arenas so dependent on computer systems that any failure in planning or developing new yester may have significant commercial consequences.
Failure in implementing newsletters and providing new services quickly enough may place a bank at serious disadvantages respect to its competitors. Internal audit It is also a responsibility of directors and management to review, monitor and tested control systems in order to assure their effectiveness on a day-to-day basis and thoroughgoing relevance to the business. A regular programmer of independent tests of security control procedures by inspectors, auditors or consultants should be implemented.
Banking varieties in Bangladesh: e-banking: E-banking provides a comprehensive range of banking services that enable the customer to meet most of their banking requirements over the net. In Bangladesh various banks provide different types of E-banking services- Bank Asia Bank Asia symbolizes modern banking with innovative services in Bangladesh. It has centralized Database with online ATM, SMS and Internet query service. Bank Asia has 21 Tams as a member of TEN along with eleven other banks.
Bank Asia is maintaining its competitiveness by leveraging on its Online Banking Software and modern IT infrastructure. It is the pioneer amongst the local banks in introducing innovative reduces like SMS banking ATM Network the Stellar Online Banking software enables direct linking of a client’s account. BRACE sank BRACE Bank deployed a layer of security system for its Internet Banking. BRACE Bank uses the most advanced commercially available exchange between the customer’s Computer and BRACE Bank. Mom over the internet is secure and cannot be accessed by any third party. SSL has been universally accepted on the World Wide Web for authenticated and encrypted communication between customers’ computers and servers. HASH Business Banking Account enables a person to receive credit of all the cash or huge deposits. Along with inward remittance and make all local payments and provide access to the wide range of services for the business requirements. With Easy Pay Machines both HASH and Non-HASH customers can make deposits and pay their utility bills.
RURAL Banking: Unlike in the past when banking was centralized in urban areas, now days technology has made it simple to set up banking facilities in rural areas. For example: In Initial, Josser, Bank Asia has introduced Mobile money banking facilities. In this case a user in a rural area will have an account with mobile company which is opened for free. They can then deposit money on that account via a nearby mobile money operating center. This money can be withdrawn at any time any were in that area and they can also receive or send money using the same system.
Branch Banking Support: Computers are vital in supporting branch banking activities. Computers at branch banks are connected to the computer at the main bank through remote communications established by a modem over a client-server computer network. The same applications used at the main bank can be used at the branch bank. Because the cost of computer hardware systems is reasonable, most branch banks ploy their own servers to connect with the main computer and are able to process banking reports which are produced in a print file at the main bank.
Comparing present situation with past in banking sector: Banks in Bangladesh perform banking activities using various specialized banking software. Some banks follow the centralized method, others follow decentralized method. Some of these software are made by the banks IT sector others are bought by the banks. Banks have bought various changes in these software over the time to ensure better banking services to the customers.