Commonly Performed Functions And Processes â€Myassignmenthelp.Com

Question: Discuss About The Commonly Performed Functions And Processes? Answer: Introduction This report is written for the purpose of conducting a research on the Accounting Information System (AIS) and Enterprise Resource Planning (ERP) systems. The business report has been prepared for a banking institution, understanding their business processes, requirements of the processes of business and the system and the impact of implementation of such a system on the efficiency of the business processes (Matengu Swami, 2011). Once the analysis of the business and its processes is completed, this study aims to recommend an AIS/ERP system for them, exploring the possible security risks associated with their application and the ways to mitigate the same (Ali, et al., 2016). Business process The business process of any organization can be understood with the help of the functions that they perform. The functions of a standard banking institution are explained in the chart below. All banking functions can be segregated into primary and secondary functions. These are also defined as banking and non-banking functions that these institutions perform. The primary banking functions are further classified into two categories, these include accepting deposits in the form of savings deposits, fixed deposits, current deposits and recurring deposits; and the second category of banking functions is granting of advances. The advances granted by the banks included overdrafts, cash credits, loans, bills etc. The non- banking functions of a banking and financial institution are also classified into the following two categories : agency functions and utility functions. The agency functions are the functions in which the banks act as an agent for their customers and provide these services . The services provided by banks as an agent are transfer of fund, collection of cheques, periodic payments, portfolio management, periodic collections etc. Apart from the agency functions, banks also act as trustees, executors, advisers and administrators for their customers working on behalf of their clients in the form of the above institutions (MIT Press, 2012). They are the link that the customers have and provide them services that deal with other banks and financial institutions. The general utility functions that the banks perform are issuing of drafts, letter of credits, etc., locker facility, underwriting of the shares, dealing with foreign exchange and currency exchange, project report, social welfare programmes etc. All the above functions performed by a bank or a financial institution are explained in the chart above. These are the basic functions that banks carry out and there are a number of additional processes that are carried out in addition to these. However, the most commonly performed functions and processes are covered in this section (Grande, et al., 2011). Business requirements The banks provide services to the customers that enable them to withdraw and deposit cash, make inquiries and make payments conveniently. The banking system needs to be updated all the time to give the customers and the stakeholders the current and updated information. The information provided must also be accurate and available on a real time basis. The advent of information technology in the banking system has made it more mobile, customer friendly and improved the quality of the service being provided to them. This has been made possible by the introduction of Accounting Information System, also known as electronic banking. The introduction of technology has also made it possible for the banks to dissipate timely and accurate information related to the treasury management and information systems. The revolution of technology has increased the competitiveness of these banking and financial institutions and revolutionized the way they develop their products and services. The globali zation of all the markets has also increased the need and pressure on the banks to introduce advanced technology systems to speed up the decision making process and to comply with the changing financial supervision requirements. https://booksreadingathome.com/downloads/accounting-information-systems-12th-edition-test-bank.pdf https://www.google.co.in/url?sa=trct=jq=esrc=ssource=webcd=1cad=rjauact=8ved=0ahUKEwjGlr-d1KHWAhVCN48KHQ32Ah4QFgg9MAAurl=http%3A%2F%2Fwww.sciepub.com%2Fportal%2Fdownloads%3Fdoi%3D10.12691%2Fjcsa-3-2-2%26filename%3Djcsa-3-2-2.pdfusg=AFQjCNHAnFy48N1TBpLgxcz3IS0u0e6glA Systems requirements It has been observed that the banks are increasingly adopted the ERP systems to digitize their working and procedures. The banks and financial institutions use these systems with typical requisitions specific to their line of work. They need a software that helps in simplifying their operations and overcoming the challenges faced by them. The system needs to be integrated with big data technologies to handle the banking data that is complex and voluminous (Mwenje, 2013). The technologies need to be advanced to ensure the safety and security of the data and the information stored. In addition to this, the data must be encrypted and stored to prevent any leaks, mishandling and misuse of the confidential information related to the banking and financial institutions and their customers. The massive network of branches that the banks possess needs to be remain well connected all the time. The software must be able to integrate the data, have the ability to perform complex resource plannin g and have the ability to synchronize the various functions of management that the banking institution constitutes of like finance, marketing, human resources, operations etc. The software must ensure the secrecy of the information while following all the prescribed rules and regulations laid down for such institutions (Venkatraman Fahd, 2016). The ERP solution recommended for a bank would thus be a one stop solution for all of the above needs, making their processes faster, more accurate and efficient. Software and vendor selection There are a number of available alternatives for the software to be selected for managing the ERP and AIS of a banking institution. Some most common options available for the same are SAP, Oracle EBS, Corniche, EBANQ, Moneyman and Cashbook. While each of the above mentioned software has the ability to handle all the banking related operations and provide support to all the operations of the organization, the German ERP designing firm SAP provides the best services. They have a customer centric software that makes use of the 360 degree customer viewpoint. Their software helps with the streamlining of the banking operations and helps with the automation of processes. They also help in the integration of the financial and operational functions of management and help in the compliance with the norms. This software is also preferred as it reduces operational costs of the organization and reduces the complexity of the tasks to be performed. It also helps the banks in innovating and providi ng the customers with best in class services that ultimately help in increasing the profitability of the bank as well. Ways to utilize technology for business efficiency The banking institutions utilize the technology and the advanced ERP systems for the benefit of both their organizations operations and to provide better services to the customers. Some ways in which they are able to do that are: Digital banking: The digital availability of banking services has made it easier for the customers to avail these services as per their convenience. The customers can now access their bank accounts at any time from any place and perform basic tasks like transfer money, check balance etc. This has also reduced the burden on the banks and has reduced their expenses on human capital (Fub, et al., 2007). Customer engagement: The customer engagement level of the banks has increased manifold with the introduction of technology and adoption of the advanced systems by the banks and other financial institutions. This has increased the customer satisfaction level and the productivity of the organization. Smarter selling: The banks are able to offer custom products and services as per the requirements of the customers. This has only been made possible by the introduction of the technology and enhanced customer centricity due to this. Wider audience: The number of people availing the services of the banks has increasingly become borderless with the ease of access. The banks have the ability to serve their customers any time and at any location. This has increased the avenues for the banking institutions and made them more decentralized than they were ever before. Efficiency from technology implementation The banking systems have without a doubt able to achieve operational efficiency by the implementation of technology. The adoption of technologically advanced systems has helped the banks in diversifying their offerings and they are able to broaden their customer base. The time taken by them for storing, processing and accessing the information has also reduced to a fraction of what it used to be when the operations were carried out manually. The banks have become increasingly dependent on these systems and the technology for information management. The information sharing time has also come down considerably and the banking systems are now more competent and agile than ever before. The technologically advanced systems help in better and more efficient strategic management and help in shaping and positioning of the banks in the market. They are an important tool that help in ensuring a competitive advantage for the banks (Tally Solutions Pvt. Ltd., 2013). Potential security risks With the introduction of technology in the banking systems, their working has become more efficient and effective. However, the increased connectivity and ease of access to the data has also caused an alarming increase in the threat and risks. The banks and other financial institutions take all measures to adhere to the security compliance and monitor the data for any leaks or security breach, however the increased connectivity causes a number of threats to the security of the data. The technological advancements also result in lack of accountability from the employees. The employees carelessness can lead to a risk of data theft and threat to information security of the organization. This also leaves the banking institutions vulnerable. Thus, they need to ensure that proper security measures are taken in order to keep the system up and running and safe for usage to win the trust of the customers. There are additional risks of introduction of malware, virus or the latest threat in the form of ransom ware. Another huge risk that the banks face due to digitization is that there is no manual record available of the transactions, account information and other bank related data. A loss of server, any glitch in the system or a potential attack that causes data loss can be threatening to the banking operations. Thus, the technology has although made the operations more convenient and efficient, the threats and potential risks associated with their adoption are also not less. Sincefinancial data is one of the most appealing targets for hackers, institutions dealing primarily in finance need to remain extra vigilant about cyber security.The banks must take additional measures to maintain the safety and security of the data and the processes to prevent any such damage from happening (Ramco, 2012). Mitigation strategies To help the banks and other financial institutions to prepare for and mitigate the potential risks associated with the introduction of technology in their operations via ERP and AIS systems, there are a few steps that can be taken. The first and the most important step to be taken for preventing data security breach is data encryption. Sensitive data and information should always be encrypted to prevent misuse of it by the hackers. The account names, numbers, addresses, and other account related customer information must be encrypted by the banks. A holistic approach must be adopted for information security. The activities of the system and the people must be monitored and a record must be maintained of the same. Any suspicious activity must be immediately reported and addressed before it aggravates and creates a problem. The banking institutions can also develop their own policy for cyber security (Hsuing Mishra, 2012). This must be communicated to the employees and should be clear and unambiguous. The systems must be tested regularly and updated to keep up with the latest technological trends. The data must be backed up on a regular basis and the potential security risks must be regularly assessed and taken care of. The backdoors must be detected early on and the systems must set up firewalls to restrict the data traffic from unreliable sources. The employees must be educated and made aware of the risks and how to handle situations involving risks or potential threats. These are some of the ways in which the banks and financial institutions can develop plans for identifying, preventing and recovering from the attacks on the safety and security of information online. Conclusion The business report has been prepared for a banking institution, understanding their business processes, requirements of the processes of business and the system and the impact of implementation of such a system on the efficiency of the business processes. Through this analysis, we have recommended an Enterprise Resource Planning (ERP) system to streamline their business processes and make their system more efficient. The advent of information technology in the banking system has made it more mobile, customer friendly and improved the quality of the service being provided to them. This has been made possible by the introduction of Accounting Information System, also known as electronic banking. The introduction of technology has also made it possible for the banks to dissipate timely and accurate information related to the treasury management and information systems. It has been observed that the banks are increasingly adopting the ERP systems to digitize their working and procedures . The banks and financial institutions use these systems with typical requisitions specific to their line of work. The German ERP designing firm SAP provides the best system solution to handle all the banking related operations and provide support to all the operations of the organization. The increased connectivity and ease of access to the data has also caused an alarming increase in the threat and risks. The banks and other financial institutions take all measures to adhere to the security compliance and monitor the data for any leaks or security breach, however the increased connectivity causes a number of threats to the security of the data. This report ends with suggesting ways to mitigate the risks associated with the introduction of technology in the banking systems. References Akrani, G., 2011. Functions of Banks - Important Banking Functions and Services, Available at: https://kalyan-city.blogspot.in/2011/04/functions-of-banks-important-banking.html Ali, B., Omar, W. Bakar, R., 2016. Accounting Information System (Ais) And Organizational Performance: Moderating Effect Of Organizational Culture. International Journal of Economics, Commerce and Management, 4(4), pp. 1-21. Fub, C., Strahringer, S. Schiereck, D., 2007. ERP Usage in Banking: An Exploratory Survey of the World's Largest Banks. Information Systems Management, 24(2), pp. 155-171. Grande, E., Estbanez, R. Colomina, C., 2011. The impact of Accounting Information Systems (AIS) on performance measures: empirical evidence in Spanish SMEs. The International Journal of Digital Accounting Research, Volume 11, pp. 25 - 43. Hsuing, R. Mishra, M., 2012. The Road to a Smooth ERP Integration: For Corporate Clients, Available at: https://www.citibank.ro/transactionservices/home/about_us/articles/docs/erp_integration_0811.pdf Matengu, K. Swami, B., 2011. Impact of Enterprise Resource Planning (ERP) in Accounting Systems: A Case Study. International Journal of Management Business Studies, 1(3), pp. 21-27. MIT Press, 2012. Information Systems: Introduction and Concepts, Available at: https://mitpress.mit.edu/sites/default/files/titles/content/9780262015387_sch_0001.pdf Mwenje, A., 2013. Enterprise Resource Planning Systems Implementation Strategies In Commercial Banks In Kenya, Available at: https://chss.uonbi.ac.ke/sites/default/files/chss/ENTERPRISE%20RESOURCE%20PLANNING%20SYSTEMS%20IMPLEMENTATION%20IN%20COMMERCIAL%20BANKS%20IN%20KENYA.pdf Ramco, 2012. Banking on business intelligence, Available at: https://www.ramco.com/downloads/WPR-Banking-On-BI.pdf Tally Solutions Pvt. Ltd., 2013. Tally Banking, Available at: https://mirror.tallysolutions.com/Downloads/TallyTips/TallyBankingKnowMoreVer4%20001.pdf Venkatraman, S. Fahd, K., 2016. Challenges and Success Factors of ERP Systems in Australian SMEs. pp. 1-18.