Kenneth Tamatcho ICT Project Year 10

BANKIN
 What is a banking application?
G
Banking applications are those applications that use computer technology to carry
out banking transactions.

APPLICA
TIONS

 ATM (Automatic Teller Machine):

These are places where customers can get cash (or carry out certain other banking
activities) using their credit or debit card.

Sequence for What goes on behind the

withdrawing cash scene
Customer puts card into ATM Contact is made with banks computer
PIN is entered using keypad PIN is checked to see if it is correct
A number of options are given
e.g. withdraw cash, change PIN etc.
The customer selects the cash option
A number of cash amounts are shown Card is checked to see if card
expiration date is exceeded or if card is
reported stolen
The customer accepts one of the Customer’s account is accessed to see
options or types in a different amount if they have sufficient funds
Check is made to see if daily limit is
exceeded
The customer is then asked if they want
a receipt
Card is returned Transaction is OK
Money is dispensed Customer’s account is updated

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Disadvantages:
 There are often in places where theft can take place at night.
 “Bogus” ATM’s can be setup to obtain information about the card.
 Some banks charge customers for the use of ATM’s.

 Internet banking:
Using internet banking requires good security. It allows the transfer of sums of
money between accounts, payment of bills, ordering of statements, and so on.
Advantages:
 There is no longer need to travel into the town center thus reducing travel
cost and time wasting; it also helps to reduce congestion and pollution in
town center.
 Users will have access to a much wider choice of products.
 Disabled or elderly people can now access any bank without the need to
leave home which greatly benefits them.
 Online banking can be done at any time on any day of the week.
 It may be less embarrassing for people to ask bank loans online rather than in
public
 Since you don’t have to stand in a long queue, internet banking saves time.
 Banks save money since they don’t need as many staff working for them or
they don’t need to hire street premises.
Disadvantages:
 It can cause isolation and lack of socialization if people stay home to bank.
 There can be health risk from online banking because of lack exercise.
 Security issues are a major concern as are viruses and other malware.
 It is necessary to have a computer and to pay for internet
 High street banks are closing because of internet banking leading to ghost
towns forming
 It is easier to make errors with online banking.

Effects on companies due to internet banking:

 Companies can save cost because it is not necessary to hire a lot of staff and
many banks aren’t needed in the high street anymore.
 Since the internet is global, the potential customer base is increased.
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Kenneth Tamatcho ICT Project Year 10

 Cost will be needed to retrain workers and need to employ staff in dispatch
department. There is also setup and maintenance cost of the banking site.
 Reduction in customer to employee interaction may lead to a drop in
customer loyalty and thus lead to loss of customers
 Robberies are less
 No need to employ security staff

 Telephone banking:
Telephone banking is similar to internet banking. The main difference is that it uses
the telephone rather than a computer.
Sequence to follow for telephone banking:
 Customer keys in their account number
 They are then told to enter a 4 digit PIN or chosen numbers from their PIN.
 The customer will then hear various options
 The customer chooses one option.
Internet banking enables the user to do the same thing as telephone banking. They
also have same advantages except for the fact that telephone banking doesn’t need
a computer and you can actually speak to a real human being. However telephone
banking is slower and has more complex options than internet banking.

 Chip and PIN:

Many credits cards are equipped with a chip as well as a magnetic stripe – this keys
in information such as the PIN. When paying with a chip and PIN a form of
electronic funds transfer (EFT) is taking place. This is the procedure;
1. The PIN is entered using a keypad.
2. The card is checked to see if it is valid
3. The PIN is read from the chip on the card and is compared with the keyed in
one.
4. If they are same, the transaction proceeds, but if you fail the third attempt,
transaction is terminated.
5. The shops bank contacts the customer’s bank.
6. A check is made on whether they have any funds
7. If the card is invalid or there aren’t enough funds, transaction is stopped.
8. If everything checks out OK, then the transaction is authorized
9. An authorization code is sent to the shop.

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10.The price of the goods is deducted from the customer’s account

11.The same sum of money is then added to the shops bank account.
12.A receipt is produced as proof of purchase

 Clearing cheques:
A cheque contains:
 the amount of the cheque
 the code line (containing account number, sort code and cheque number)
Read data on cheques when clearing is converted into an encrypted file known as
IBDE (Inter-Bank Data Exchange) file. Every IBDE is “signed” with a digital
signature so that the receiving bank can be sure that the receiving bank can be sure
the data hasn’t been tampered with.
Clearing cheques, takes three working days.
A cheque may be returned unpaid if:
 The customer hasn’t got enough money in their account to pay the cheque.
 It has not been signed, dated, or written correctly.
 It is fraudulent for some reason

 Electronic Funds Transfer (EFT):

Electronic funds transfer is a system that allows money transfer instructions to be
sent directly to a banks computer system. No actual money is transferred the whole

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system relies on the electronic transfer of money.