Part 2: Computers used in Banking Computers in Banking and Retail - Part 2 - Computers used in Banking CEL: Computers in Banking and Retail Part 2: Computers used in Banking [Sec 2-4] Name: _____________________ Class: ____________ Prepared by Tan Chai Yong

Computers in Banking and Retail - Part 2 - Computers used in Banking Objectives Give some examples of how computers are used in the bank: such as cash dispenser, cheque processing, management of customers’ accounts and on-line banking (mention how data is captured through the use of MICR, magnetic strips) State that a personal identification number (PIN) is commonly used as a security measure when using a smart card Prepared by Tan Chai Yong

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.1 How Computers are Used in Banks Computers help banks save millions of dollars annually Prepared by Tan Chai Yong

Bank Computer Networking

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.1 Bank computer networking 2.8 How Computers are Used in Other Industries Prepared by Tan Chai Yong

Computers are used in Banks for………

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.1 Computers are used in Banks for Management of customers’ accounts Cheque processing Online banking Dispense Cash using ATM Confidential activities Prepared by Tan Chai Yong

Management of customers’ accounts

2.2 Management of customers’ accounts Store information. Store your name, address and account number. Update information. Update your account balance when you deposit or withdraw money or calculating interest. Print information. Print account balance.

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.2 Management of customers’ accounts Bank customer details and transactions stored in central computers or servers A database management program is used to Update customers’ data Retrieve data quickly Can be accessed by bank terminals, ATMs, POS terminals and PCs at home Prepared by Tan Chai Yong

Cheque processing How does it work?

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.3 Cheque processing On the cheque, the cheque number is printed with magnetic ink. [Special symbols printed on cheque] A special machine, Magnetic Ink Character Recognition (MICR) reader reads the magnetic ink characters. Prepared by Tan Chai Yong

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.3 Cheque processing (Cont’d) MICR reader magnetizes and translates symbols The Cheque information is then transmitted to Automated Clearing House (ACH) for sorting. This information is fed into the bank’s database to check if there is sufficient fund and to transfer the funds into your account. Banks able to process cheques faster and cheaper Prepared by Tan Chai Yong

Online Banking or Internet banking What are the services?

2.4 Online Banking or Internet banking Traditional Method Consumers must be physically present to use the services

2.4 Online Banking or Internet banking Traditional Method Consumers must be physically present to use the services

2.4 Online Banking or Internet banking Online banking allows us to make deposits, withdrawals and pay bills all with the click of a mouse via the Internet. We no longer have to leave the house.

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.4 Online Banking or Internet banking Prepared by Tan Chai Yong

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.4 Online Banking or Internet banking Services Transactional (for examples:) Funds transfer between a customer's savings accounts, or to another customer's account paying bills, Investment purchase or sale Prepared by Tan Chai Yong

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.4 Online Banking or Internet banking Services Non Transactional (for examples:) checking transactions Loan applications New account applications Printing bank statement Prepared by Tan Chai Yong

Using ATM [Automated Teller Machine ] How does it work? What are the bank services?

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.5 Using ATMs Commonly seen computers in banks Prepared by Tan Chai Yong

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.5 How does ATM work? These terminals are networked to a central computer where database is stored. Terminals are used to input data for each transaction. It needs both an ATM card and a Personal Identification Number [PIN]. Prepared by Tan Chai Yong

2.5 The Bank Network using ATM

2.5 Bank Services Using ATMs Offers banking services: withdrawal of money [dispense cash], checking of balances and transferring money from one account to another. Other banking services. bidding of Certificate of Entitlement (COE). Electronic Payment of Shares (EPS) Getting new cheques books Updating bankbooks.

A plastic card with your name and card number. 2.5 ATM Cards A plastic card with your name and card number. A magnetic strip at the back which stores the personal data.

How do you safeguard your money using ATM?

2.5 ATM Cards Safe Guard your money To safeguard your money: Keep the ATM card in a safe place. Keep the Personal Identification Number [PIN] a secret. Change the PIN regularly. Memorise the PIN and do not write it down. If you need to write the PIN down, keep it away from your card.

Advantages of using Electronic Banking

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.6 Why Electronic Banking is Popular? Benefits to customers Convenience ATMs found in many places Accessibility Computers can work long hours Security All transactions are recorded Predictability Computers are predictable Prepared by Tan Chai Yong

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.6 Why Electronic Banking is Popular? Benefits to banks Low cost Banks do not need to open many branches and employ many people to serve a majority of customers Security Security features are built into ATMS e.g. camera Accounting Computers makes capturing transaction records easier Prepared by Tan Chai Yong

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.6 Why Electronic Banking is Popular? Computers help banks reduce cost of doing business Prepared by Tan Chai Yong

2.7 Summary Using Computers in Banking 1) Using ATMs 2) Online banking [using Internet] 3) Clearing Cheques 4) management of customers’ accounts

2.7 Summary Using Computers in Banking 1) Using ATMs Transfer money Pay bills Withdrawal money [dispense cash] Buy shares Check account balance

2.7 Summary Using Computers in Banking 2) Online Banking using Internet Transfer money Pay bills Buy shares Check account balance

Magnetic ink character recognition 2.7 Summary Using Computers in Banking 3) Clearing cheques Magnetic ink character recognition reader

2.7 Summary Using Computers in Banking 4) Management of customers’ accounts [name, account no, balance, transaction ….]

Computers in Banking and Retail - Part 2 - Computers used in Banking 2.8 Q&A Any of the below Convenience Accessibility at any time Security Predictability Low cost Accounting Prepared by Tan Chai Yong