Essay On Use Of Computer In Banking Sector

Essay Topic: Use Of Computer In Banking Sector

According to the report of World Bank, banking sector is adequately capitalised and well-regulated when connected with computer systems. Banking industry is performing far better in financial , technological and economic terms than other industries. In the contemporary era, banks and computers are interrelated. Without technology, working of the banking sector will be hampered. Hence, computer systems are lifeline for the banking industry.

Computers serve wide-ranging functions for this industry such as working of ATMs , processing online payment  services , internet banking services, trading in securities, verification of funds, maintaining customer’s account , transferring funds, carrying out day-to-day administration, implementing government schemes, and many more. Below are mentioned some of the uses of computer in the banking sector.

1) Everything On Our Fingertips –

Banking is one of the oldest business in the world. Still, it is progressing and generating great results for the economy. In the earlier times, people had to safely keep their account passbooks, cheque books, cash, cards. It is was a such a menace. But now the time has changed. We can store each banking item from passbook to payment cards in digital format. It is easily accessible. Now, the world is at our finger tips due to information technology. We can shop anything from anywhere by using digital wallets and currency. So, we can even shop for the Singapore shopping festival from home.

2)  Wonders For The Economy –

With hassel free banking, more and more people are getting associated with this specific industry. Banks can utilise people’s money for lending to manufacturers and businessmen. Computers help in service outreach and better productivity. As they say, backbone of an economy is sound and efficient banking. Countries are aiming for a cashless economy.

3) Banking From Home –

Opening bank account was a very time consuming process. But with computers, it is now a hassle free process. Customers can open digital accounts from the comfort of their home. It will induce more people towards opening their accounts with the banks. Hence, it increases financial inclusion of poor and marginalized sections of the society.

4) Error Free Work – 

Human is prone to make errors. It decreases productivity of banks. With increased use of computer system, there are less chances of manual errors and more chances of accelerated productivity. The frequency of computers making an error is negligible. This in turn has increased the user experience. Computer has allowed the use of business intelligence in the banking sector. Thereby, it helps in increasing productivity, accountability , profitability and efficiency. Daily administrative operations of the banks have become more efficient.

5) Digital Banking –

The process of converting the typical facilities of a bank like physically visiting the bank to withdraw cash for payment into a digital mode. Digital banking promotes financial inclusion of the country. It is the means to achieve the masses. A physical bank build in brick and mortar can be supplemented with digitalization of banking services. It has various advantages such as – unified customer experiences, fastest possible output, infinite banking volumes, operational efficiencies, and much more. Demand for digital cash is increasing day by day.  The use of peer-to-peer payment systems such as PayPal and crypto currencies such as Bit coins are gaining worldwide popularity among citizens. Although, the government of some countries are skeptical about the use of crypto currencies because kf their decentralised nature.

6) Hardware Technology –

Early in the1960s, bank hardware had two essential components namely, mainframe and a punch card machine. Punch cards contained customer account information which was stored in the part called punch card. Whereas, punch card machine read it into the main system. Minitower system such as server hardware configurations, now has the capability to run an entire bank along with receiving payment transactions from customers associated with the bank. These new hardware technologies are possible because of the computer systems. We have moved to a new era of the banking industry from the legacy banking hardware systems. Latest hardware technologies have enabled traditional advances into wireless banking and telecommunications banking.

Computer adaptability in the banking sector gives positive outcomes for the economy. So, every other country of the world is aligning the computer systems with banking industry. But with many advantages, it has some disadvantages connected with it also. With the accelerated use of computers, their prevails the threat of cyber attack on the banking systems. Now everything is visible online, hackers and other malicious people can manipulate computer systems to generate information as per their convenience. Banks must protect themselves from such attacks.