INFORMATION SYSTEM IN BANKING SECTOR

compiled by K GOWTHAM KUMAR

INTRODUCTION
‡ 1 what is information system ? ‡ 2 why is matters ?

‡What is information system?
data

people

Information system Telecommunication software

Why information system matters?
‡ 1. Operational excellence ‡ 2. New products, services, and business models ‡ 3. Customer and supplier intimacy ‡ 4. Improved decision making ‡ 5. Competitive advantage ‡ 6. Survival

Cont d:

‡ To do things better, faster and cheaper

IS in banking sectors
1. The term is not new to the banking sector. Since the early 90s, banks have been using this terminology to refer to the process of generating various reports and analyses at the Corporate/Head offices for their decision making for own use as well as for conveyance to authorities in charge of regulation 2. MIS in the present context of high availability of voluminous data electronic media at diverse locations and on diverse platforms, has become more pertinent to banks decision-making process, thanks to the availability of new tools of technology such as data warehousing, data mining 3. Management Information System would thus be the end product of both the processes - data warehousing and data mining.

Need for building IS
‡ The need for building IS at the corporate level has increased considerably during the last few years because of the following reasons :
Regulatory requirements indicated by the RBI for preparation of Off-site Monitoring Surveillance (OSMOS)Reports on a regular basis in electronic format Asset Liability Management (ALM) guidelines for banks being implemented by the RBI w.e.f. April 1, 1999 with the stipulation that the banks should capture 100 percent of their business through the ALM system by April 1, 2000. Need for timely submission of Balance Sheets and Profit & Loss Accounts Need for Inter-Branch Reconciliation of Accounts within a definite time frame Need to meet the stipulations made by the Central Vigilance Commission (CVC) to computerize at least 70 percent of banking business by January 1, 2001. Need to undertake risk management strategies and for this purpose build up appropriate sets of data and market intelligence reports.

BENEFIT OF IS
Significant cost benefits, time savings, productivity gains and process reengineering opportunities are associated with the use of data warehouse for information processing. Data can easily be accessed and analyzed without time consuming manipulation and processing. Decisions can be made more quickly and with confidence that the data are both time-relevant and accurate. Integrated information can be also kept in categories that are meaningful to profitable operation.

Applications of IS in banking
‡ ‡ ‡ ‡ ‡ New mobile payment method. Electronic clearing services (ECS). National electronic fund transfer(NEFT) Real time gross settlement(RTGS) E-commerce etc.

How It Works.

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