Computer application in commercial banking and other

Computer innovation is one of the major scientific developments of 20th century and very will running with more prospects and developments into the 20th century. In fact, a computer application has made its entry in all the areas of and fields of human development. Human development impact is correlated with our legation and in turn religion is directly applied to the applications of scientific developments. Through computer was innovated during the late 1950’s the major impact of which has felt in real life during 1980’s.

Now the computer applications have made our life more easy, economical and even prosperous. Computer technology now rules the fields of communications, transport, banking, space science, defense etc. Commercial Banking is the main back bone of the running economy which in turn deals with day to day financial transactions. Earlier bank transactions were managed through white and black transaction modes, involving lots and lots of registers, ledgers, account books, pass books, record sheets etc. All the daily transactions are managed then and there recording manually in the appropriate registers. This mode of manual recording of registers also led to occasional mistakes in the rallying of account transactions.

During the 1990’s the Indian banking system was switched over to computer banking in phases. Computer banking in fact was not brought at once in India because of the vase updating and recording data of the vast updating of various individual governmental and company financial transactions. Computer banking, in fact, has been made very effective and applied in all the areas of banking only form 2006 on wards. Computer mode electronic transaction so on date is prevalent in all the nationalized banks and private banks. In fact, electronic transactions are made for each and every transaction and perhaps ledger entries are made but for few unavoidable cases.

Computer banking starts from the very basic. When a customer steps into the bank all entries are made with electronic recording. The debits as digital mode

each and every customers name address, nominee details etc are recorded in the computer and in fact the photos and signature of the individual are also being maintained under the scan system for easy verifications and the identifications of the individuals. The drafts electronic money transfer advises to other banks are all managed through the electronic teller machine (ATM) is of great advantage to the customers. This ATM has made customers wait drastically reduced waiting in long ques. The advantage of ATM debit cards, credit cards facilities have also made customers life easier. By resorting to electronic banking credit cards reduce carrying money and cut the burglary risk.

Again the formation of core banking system through electronic means has resulted in very swift money transactions with in minutes to any branch, anywhere in India. Hence banking through electronic computer applications can be better said as the main estimation for the prosperity of banking customers. Computers in the banking sector have enhanced customer service and productivity regarding account management, while streamlining back-office activities. The biggest impact is in the area of competition. Small banking institutions can access the same technology as large banking institutions and, therefore, can compete with them more effectively for business.

                                  

Banking

o    Computers are instrumental to the way the banking industry performs its business. This technology allows banks to be able to take transactions and update accounts in real time.

An advantage to the bank customers is an increase in convenience. By linking computers and automated telling machines (ATMs), people are able to access their money at any hour of the day.

Online banking is another effect of computer technology on the banking industry. With online banking, customers are able to pay bills electronically and manage accounts and transfer money from the comfort of their own homes. Additionally, computers allow people to set up automatic payments from their bank accounts to such places as utility companies and insurance groups.

Electronic Transactions

o    Banking systems must perform electronic transactions. Direct deposit is an example of an electronic transaction. Computers processing electronic transactions must have hardware and software encryption capabilities to keep data from being compromised during a transmission. After the computer performs electronic transmissions, it transfers the information to the main computer system for processing and updating. Banks have extended electronic transaction capabilities through landline and cell phones, the Internet and ATMs.

 

Efficiency

o    The use of computers in the banking and insurance industries has made their respective processes efficient. Both the banking and insurance industries rely on calculations to perform their respective operations. Computers decrease the amount of time needed to perform complex calculations and allow professionals in these industries to calculate many formulas at the same time. Computers also increase the efficiency of these industries by reducing the potential of humans to err and make incorrect calculations.

 

Account Management

o    In banking, activities start with banks automating customer accounts, which allow personnel to create, update and maintain customer records. Banking hardware and software have enhanced the accuracy of accounts that tellers and other banking personnel process. Banking software performs customer transactions through a centralized data record system. Account management is the genesis and backbone of all banking information systems.

Hardware Technology

o    In the 1960s, bank hardware consisted of a mainframe and a punch card machine. Punch cards contained customer account information and were read into the main system by a punch card machine. Mid range and client/server hardware configurations, which are no larger than a mini tower system, can run an entire bank in addition to receiving transactions from affiliated bank branches. These new hardware technologies can process more transactions than legacy banking hardware systems. Hardware technologies have enabled advances into wireless banking and telecommunications banking.

Web-based Banking

o    Web-based banking systems use a dedicated server through a bank network system. An area of the banking system is partitioned for Internet applications. Web-based banking systems by law must include secure servers and authenticated certificates regarding transactions from the Federal Deposit Insurance Company and the Federal Reserve Board. Customers who choose to bank online can access their account through a web interface, which integrates with the main computer. A customer's credentials -- user ID and password -- pass through several checkpoints before entering the main system to perform a web-based transaction.

Technology plays a tremendous role in the modern banking and insurance industries. The use of computers, specifically, has allowed changes with regard to how data is retained and transactions conducted. Computers also link up branches from anywhere in the world. Communication and information transfer happens in a matter of moments. These functions make computers an extremely valuable tool in the banking and insurance indusies.

 

Data Retention

o    Both the banking and insurance industries rely on the retention of vast amounts of information. Computer technology makes this information more easily accessible and also requires less amount of physical space. Records can be backed up easily with computer storage. With the valuable information retained within the banking industry, security is a concern. As such, banks use the most modern programs to deter hackers from stealing sensitive data.

Customer Information                                       

o    Banks use computers to track customer information such as name, address, and phone number, 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

o    With a computer, banks can analyze aging reports and track the customers who have had checks returned due to nonsufficient 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

o    Computers help tellers keep a record of all transactions for the day. When customers 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

o    A bank can use computers for new loan applications and credit card applications and opening new accounts such as checking, savings or certificate of deposit accounts.

Delinquency

o    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

o    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 see which safety deposit boxes are available and they can keep a record of customers who have safety deposit boxes.