Executive Summary:
Information systems are extremely vital for the growth and survival of business organizations in today’s world. All sectors of the industry are entirely dependent on these for the management of important information and data. Small organizations to large, powerful businesses such as high street banks and central and local government are taking the help of information systems to regulate their data. In this paper, we will discuss the various advantages of the use of information systems in the banking industry. We will thoroughly analyze the requirements of information systems at the various different levels and review the security needs for these purposes.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

Use and Benefits of Information Systems in the Banking Industry:
The advent of computers has given rise to information systems being used as a business tool on a large scale. Computers and more specifically information systems are being used on a large scale by almost all businesses. The application of the capabilities of Information systems and technologies brings out improvement in business processes (Davenport and Short, 1990). One of the major sectors to reap the benefits of computers and information systems is the banks. The nature of the banking industry along with other financial industries involves information and trust. Being in the service industry, banks are in the most need of information. Technologies like cloud computing and other internet based information storage systems have allowed banks to deliver state of the art customer services to its customers while maintain the market competitiveness required for gaining business. The following paper analyzes the information needs of the banks at various departmental levels and compares the security levels used by banks with those in other sectors. At the end of the paper, one should be able to understand the most commonly used technologies in banks, the security measures currently used in banks and whether or not there is scope for further improvement.
Information Needs in Banks:
The need of information was first realized in the banking industry. Being in the service sector, banks needed to store information to better their services and gain a competitive edge over their competitors. Basic services include the book keeping records of the customers while the luxurious ones include the facility of an IVR (Interactive Voice Recording) through which customers can get answers to their F.A.Q’s. However, developing an information system needs huge investments, responsibility of non-leakage of information (robustness of the system), and various other security measures. Banks therefore need information at every stage possible. The benefits of information are many. Today, decision making systems are also used by banks for purposes of marketing newer loan schemes. Typically, banks might need information at the following levels.
Basic or Level 1:
This is the most basic level. Information at this level might be used purely for administrative purposes. Tasks include book keeping, account handling of customers etc. The revolution of internet banking has made the basic level much more attractive to customers than it used to be. Moreover the concept of phone banking through IVRs has further proved to be a major technological step towards the progress of banks and IT systems.
Advanced or Level 2:
At this level, information is crucial and is used at the managerial level. Managers use certain information like stock listings, annual general meetings etc in databases that is to be kept secure. This information is supposed to be secret and cannot be distributed without consent and proper authoritative power. Information at this level is hardly for customer use. However, in cases of fraud and cheating, banks can use this as a safety measure to ensure their reputation does not lose.
Evaluation of Information Systems:
Majority of the banks in the western countries and more recently in Asian countries to use the advent of information systems to bolster their business. Decision making tools, account management systems, and internet based systems are widely used by banks to lure customers in the quest to attract them. Since the sector they operate is the service sector, banks need to realize that they can ill afford to let their customer service affect due to the technological advances. To evaluate the information systems used by banks, one needs to realize the general nature of information systems used by banks currently.
Nature of Information systems currently used by banks:
A variety of information systems are being used by banks. Currently, most banks operate with multiple legacy systems that operate on a single mainframe computer (Lenard ML, Ferran C 1997). With times, this basic concept has not changed much. The concept of object oriented programming has given rise to the use of multiple servers thereby reducing the load on a single PC. Moreover, the internet has evolved as a complete source of secure technology that acts as a useful resource to the banks. The advent of internet based systems (popularly known as web based systems) has allowed banks to be more precise and keep a hassle free record system. However, the internet based systems have led to many security issues. The next section describes them.
Security:
The main problem of internet based applications is the level of security provided. There have been a number of cases with the most famous ones being the ATM card duplication and credit card faults have all arisen due to information system vulnerability. Therefore, banks need to provide a level of security that cannot be breached. It is tough to say that the system is “foolproof” since programming involves coding and decoding. Therefore what can be coded can also be decoded. However, many security measures have been taken by bank authorities in accordance with the IT professionals to allow smooth hassle free banking through the use of computers and information systems. Some of the common security features include the secure server technology (SSL technology), Enforcement of laws like the Data protection act enables for more careful banking by the banks. The law enables anyone the use the information provided over the internet with due care and only with the consent of the provider of that information. This law has worked wonders in that it has made the owners of websites more responsible to such mishaps. Information flooded over the internet can only be used for purposes said and described prior to collection of it. Law thus acts as one of the barriers to those who want to breach it. Apart from law, security levels include password remembrance systems, additional information provision and providing passwords to specific phone numbers only. By doing this, the internet has taken help of other acquisitions of humans into consideration. The logic is that a human cannot lose all at a time and hence is a good measure to reduce the security threats.
Cloud Computing?
Cloud computing is the term given to applications which operate over the web and are accessible to everyone who has an access to the internet. Intranet, knowledge based systems and websites are all examples of cloud computing. Cloud computing takes help of a third party service provider to rent the applications. With cloud computing, users need to have little expertise over the computer and its working. This calls for major security threats since it can be accessible by anyone who has access to a computer. Computer literacy is also little required. However, for our chosen organization cloud computing is not suitable. Although in other service sectors, cloud computing has worked wonders to attract customer base, banks cannot afford to use such systems. In fact, banks can operate with secure systems and yet gain an advantage by stating their expertise and care they take for their customers.
To conclude, the use and benefits of information systems in banks are many. Along with these come many challenges which the banks need to take care of. However, with the wonderful invention, banks have certainly been revolutionized.
References:
C. Ferran and M.L Lenard, “An Object Oriented Approach to Banking Information Systems”, 1997, pp. 1-7.
D.E. Avison and V. Taylor, “Information systems development methodologies: a classification according to problem situation”, Journal of Information technology, 1997, pp. 73-81.
T.H. Davenport and J.E. Short, “Information technology and business process design”, Operations Management, 1990, Vol.3, pp.11-27.