ERP Systems and Banking Operations

This assignment delves into the influence of Enterprise Resource Planning (ERP) systems on banking operations. It examines how ERPs affect banking performance, highlighting both the challenges and success factors associated with their implementation in the financial sector. The analysis draws upon various research papers and real-world case studies to provide a comprehensive understanding of this crucial topic.

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Contents
Introduction.................................................................................................................. 3
Business process............................................................................................................3
Business requirements....................................................................................................4
Systems requirements.....................................................................................................5
Software and vendor selection.........................................................................................5
Ways to utilize technology for business efficiency............................................................6
Efficiency from technology implementation.....................................................................8
Potential security risks................................................................................................... 8
Mitigation strategies.....................................................................................................11
Conclusion..................................................................................................................12
References.................................................................................................................. 13
Bibliography............................................................................................................... 15
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Introduction
This report is composed with the end goal of leading an examination on the Accounting
Information System (AIS) and Enterprise Resource Planning (ERP) frameworks. The
business report has been set up for a banking organization, in order to understand various
business processes conducted by a bank, the necessities of the procedures of their business,
the use of ERP framework in such an institute and the effect of execution of this framework
on the productivity of the business forms (Matengu & Swami, 2011). On the completion of
the examination of business and its procedures, this investigation plans to suggest an
AIS/ERP framework for them, investigating the conceivable security dangers related with
their application and the approaches to combat these dangers (Ali, et al., 2016).
Business process
The business procedure of any association can be comprehended with the assistance of the
functions that they undertake. The functions performed by any bank can be majorly
categorized into primary functions and secondary functions. The essential keeping money
capacities are additionally ordered into two classes, these handling savings accounts, current
accounts, recurring deposits and fixed deposits. The primary functions, also include the
lending of grants and advances in the form of cash and credit, loans, overdraft and bills (MIT
Press, 2012). The non-banking elements of a financial banking institute can also be put into
two different categories, namely; agency functions and utility functions. The tasks in which
the bank acts as an agent for its client and gets the work done for them and provides relevant
services are known as the agency functions of the bank. The facilities given by the banks as
an agent include an exchange of money, gathering of cheques, periodic payments, portfolio
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administration, occasional accumulations and so forth. Aside from the office capacities,
banks additionally go about as trustees, agents, consultants and overseers for their clients
chipping away at the sake of their customers as the above establishments. They are the
connection that the clients have and give them services that include dealing with different
banks and monetary organizations. The general utility capacities that the banks perform are
issuing of drafts, letter of credits, locker office, guaranteeing of the offers, managing remote
trade and cash trade, venture report, social welfare programs and so on (Akrani, 2011).
Business requirements
The banks give administrations to the clients that empower them to pull back and store
money, make request and make payments helpfully. The framework of the banking
organization should be refreshed in order to provide updated opportunities to the clients and
the partners and provide them with the latest figures and facts. The data given should
additionally be precise and accessible consistently. The approach of data innovation in the
managing a banking business framework has made it more portable, client well disposed and
enhanced the nature of the administration being given to them. This has been made
conceivable by the presentation of Accounting Information System, otherwise called digital
banking. The presentation of innovation has additionally made it workable for the banks to
scatter convenient and precise data identified with the treasury administration and data
frameworks (Mwenje, 2013). The revolution of innovation has expanded the aggressiveness
of these banking and financial organizations and changed the way they build up their items
and administrations. The globalization of the considerable number of business sectors has
additionally expanded the need and weight on the banks to acquaint propelled innovation
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frameworks with accelerate the basic leadership process and to agree to the changing
monetary supervision necessities.
Systems requirements
It has been witnessed that the banks are progressively receiving the ERP frameworks to
digitize their working and strategies. The banks and monetary foundations utilize these
frameworks with normal demands particular to their profession. They require a product that
aids in disentangling their operations and conquering the difficulties confronted by them. The
framework should be incorporated with huge information advancements to deal with the
banking information that is unpredictable and voluminous (Venkatraman & Fahd, 2016). The
innovations should be progressed to guarantee the wellbeing and security of the information
and the data put away. Moreover, the information must be scrambled and put away to keep
any breaks, misusing and abuse of the secret data identified with the managing of bank and
monetary organizations and their clients. The huge system of branches that the banks have
should stay very much associated constantly. The product must have the capacity to
coordinate the information, perform complex asset arranging and synchronize the different
elements of administration that the saving money foundation constitutes of like back,
advertising, HR, operations and so forth. The product must guarantee the mystery of the data
while following all the endorsed principles and controls set down for such establishments.
The ERP arrangement prescribed for a bank would along these lines be a one stop answer for
the greater part of the above requirements, making their procedures speedier, more precise
and effective.
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Software and vendor selection
There are various accessible options for the product to be chosen for dealing with the ERP
and AIS of a keeping money organization. Some most regular alternatives accessible for the
same are SAP, Oracle EBS, Corniche, EBANQ, Moneyman and Cashbook. While each of the
previously mentioned programming can deal with all the banking related operations and offer
help to every one of the operations of the association, the German ERP outlining firm SAP
gives the best administrations. They have a client driven programming that makes utilization
of the 360 degree client perspective. Their product assists with the streamlining of the
keeping money operations and assists with the computerization of procedures. They
additionally help in the mix of the monetary and operational elements of administration and
help in the consistence with the standards. This product is additionally favored as it
diminishes operational expenses of the association and decreases the many-sided quality of
the undertakings to be performed. It additionally helps the banks in improving and furnishing
the clients with best in class benefits that eventually help in expanding the gainfulness of the
bank too (Fub, et al., 2007).
Ways to utilize technology for business efficiency
The bank utilizes an approach which best suites its business needs and operations, since the
managing an account frameworks make utilization of the considerable number of modules of
ERP. Accordingly, it needs to search for a technique that will incorporate the business
exercises. Associations that are aggressive and enormous utilize thorough way to deal with
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execute ERP framework. It is irregular for association to execute all modules in the
meantime, however a few associations will go out on a limb.
By embracing this approach association can spare cost, limit the time taken to finish a
business procedure, encourage everyday working and basic leadership. Be that as it may; a
few assets must be apportioned, the usage cost and time are practical and not high but rather
loaded with a high hazard and vulnerability. The pilot execution approach includes
actualizing the total ERP framework at a chose site, branch or area of an association. The
heritage framework keeps on working in the association, resulting to the accomplishment of
the ERP framework at the pilot site; it is executed in the exceptional branches or areas of the
association, ordinarily utilizing direct exhaustive usage approach. The danger of framework
disappointment is diminished by utilizing a pilot execution approach since it will go about as
a testing strategy of the ERP framework. The Pilot usage approach is costly contrasted with
the extensive ERP execution approach and furthermore protect authoritative information with
even operation.
The banks use the innovation and the progressed ERP frameworks for the advantage of both
their association's operations and to give better administrations to the clients. Some courses in
which they can do that are customer engagement, smarter ways of selling, digital money
keeping and wider audience coverage. The client engagement level of the banks has
expanded complex with the presentation of innovation and appropriation of the propelled
frameworks by the banks and other money related organizations. This has expanded the
consumer loyalty level and the profitability of the association. The banks can offer custom
items and administrations, according to the necessities of the clients. This has just been made
conceivable by the presentation of the innovation and upgraded client centricity because of
this. The advanced accessibility of banking administrations has made it simpler for the clients
to profit these administrations according to their benefit. The clients would now be able to get
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to their financial balances whenever from wherever and perform essential assignments like
exchange cash, check adjusts and so on. This has likewise lessened the weight on the banks
and has decreased their costs on human capital. The quantity of individuals benefiting the
administrations of the banks has progressively turned out to be borderless without breaking a
sweat of access. The banks can serve their clients whenever and at any area. This has
expanded the roads for the saving money establishments and made them more decentralized
than they were ever some time recently.
Efficiency from technology implementation
The ERP technology has helped the banks to attain operational efficiency and innovation
without any doubt. The selection of innovative propelled frameworks has helped the banks in
expanding their offerings and widening their client base. The time taken by them for putting
away, handling and getting to the data has likewise decreased to a small amount of what it
used to be the point at which the operations were done physically. The banks have turned out
to be progressively reliant on these frameworks and the innovation for data administration
(Tally Solutions Pvt. Ltd., 2013). The data sharing time has additionally descended
impressively and the managing an account frameworks are currently more able and
coordinated than any time in recent memory. The mechanically propelled frameworks help in
better and more proficient key administration and help in molding and situating of the banks
in the market. They are a vital device that assistance in guaranteeing an upper hand for the
banks.
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Potential security risks
The normal causes for ERP usage disappointments in any association are pretty much
because of the powerlessness hierarchical structure and administration which are basic
business issues in the execution. In a review directed by Shari S. C. Shang and Tsung-Lin Wu
(2004) it is demonstrated that 62% of the ERP framework usage flops because of the
insufficient audit of the causative specialist for the disappointment the same number of
inquires about concentrate on its vital advantage, preferences as opposed to distinguishing the
intention behind its failure after execution (Ramco, 2012). A portion of the significant
explanations behind the disappointment of this strategy are incorrect information, non-
similarity of the product, exit of underwriters, long haul back and ineffectual counsel.
With the presentation of innovation in the banking frameworks, their working has turned out
to be more productive and compelling. Be that as it may, the expanded network and
straightforward entry to the information has additionally caused a disturbing increment in the
danger and dangers. The banks and other budgetary foundations take all measures to stick to
the security consistence and screen the information for any breaks or security rupture;
however the expanded availability makes various dangers the security of the information. The
mechanical progressions likewise result in absence of responsibility from the workers. The
representative's imprudence can prompt a danger of information burglary and risk to data
security of the association. This additionally leaves the managing an account organizations
powerless. In this way, they have to guarantee that appropriate safety efforts are taken so as
to keep the framework up and running and safe for us to win the trust of the clients (Hsuing
& Mishra, 2012). There are extra dangers of presentation of malware, infection or the most
recent risk as payoff product. Another colossal hazard that the banks confront because of
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digitization is that there is no manual record accessible of the exchanges, account data and
other bank related information. The loss of a server or a potential assault that causes
information misfortune can be undermining to the operations of a banking organization.
Subsequently, the innovation has albeit made the operations more advantageous and
effective; the dangers and potential dangers related with their application are additionally not
less. Since money related information is a standout amongst the most engaging focuses for
programmers, foundations managing principally in fund need to stay additional watchful
about digital security. The banks must take extra measures to keep up the wellbeing and
security of the information and the procedures to keep any such harm from happening.
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Mitigation strategies
To help the banks and other monetary foundations to plan for and alleviate the potential
dangers related with the presentation of innovation in their operations by means of ERP and
AIS frameworks, there are a couple of steps that can be taken. The first and the most critical
stride to be taken for avoiding an information security rupture is information encryption.
Delicate information and data ought to dependably be scrambled to avert abuses of it, by the
programmers. The record names, numbers, addresses, and other record related client data
must be scrambled by the banks. An all encompassing methodology must be embraced for
data security. The exercises of the framework and the general population must be observed
and a record must be kept up of the same. Any suspicious action must be quickly announced
and tended to before it disturbs and makes an issue. The banking establishments can likewise
build up their own particular arrangement for digital security. This must be conveyed to the
workers and ought to be clear and unambiguous (Grande, et al., 2011). The frameworks must
be tried frequently and refreshed to stay aware of the most recent innovative patterns. The
information must be moved down all the time and the potential security dangers must be
routinely surveyed and dealt with. The indirect accesses must be recognized right off the bat
and the frameworks must set up firewalls to limit the information activity from questionable
sources. The workers must be instructed and made mindful of the dangers and how to deal
with circumstances including dangers or potential dangers. These are a portion of the routes
in which the banks and money related establishments can create plans for recognizing,
keeping and recouping from the assaults on the wellbeing and security of data on the web.
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Conclusion
The business report has been set up for a banking establishment, in order to understand their
business forms, prerequisites of the procedures of business and the framework and the effect
of execution of such a framework on the effectiveness of the business forms. Through this
examination, we have suggested an Enterprise Resource Planning (ERP) framework to
streamline their business procedures and make their framework more productive. The coming
of data innovation in the managing an account framework has made it more portable, client
agreeable and enhanced the nature of the administration being given to them. This has been
made conceivable by the presentation of Accounting Information System, otherwise called
electronic keeping money. The presentation of innovation has likewise made it feasible for
the banks to disseminate opportune and precise data identified with the treasury
administration and data frameworks. It has been watched that the banks are progressively
embracing the ERP frameworks to digitize their working and methodology. The banks and
money related establishments utilize these frameworks with run of the mill orders particular
to their profession. The German ERP outlining firm SAP gives the best framework answer
for handling all the keeping money related operations and offer help to every one of the
operations of the association. The expanded network and straightforward entry to the
information has additionally caused a disturbing increment in the danger and dangers. The
banks and other money related foundations take all measures to hold fast to the security
consistence and screen the information for any holes or security break; however the expanded
network makes various dangers the security of the information. This report closes with
proposing approaches to relieve the dangers related with the presentation of innovation in the
managing an account frameworks.
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References
Akrani, G. (2011). Functions of Banks - Important Banking Functions and Services.
Retrieved from http://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), 1-21.
Retrieved from http://ijecm.co.uk/wp-content/uploads/2016/04/447.pdf
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), 155-
171. Retrieved from
http://www.tandfonline.com/doi/abs/10.1080/10580530701221056?
journalCode=uism20&
Grande, E., Estébanez, 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, 11, 25 - 43. Retrieved from
http://uhu.es/ijdar/10.4192/1577-8517-v11_2.pdf
Hsuing, R., & Mishra, M. (2012). The Road to a Smooth ERP Integration: For Corporate
Clients. Retrieved from
http://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), 21-27. Retrieved from http://www.ijmbs.com/13/bnswami.pdf
MIT Press. (2012). Information Systems: Introduction and Concepts. Retrieved from
https://mitpress.mit.edu/sites/default/files/titles/content/9780262015387_sch_0001.pd
f
Mwenje, A. (2013). Enterprise Resource Planning Systems Implementation Strategies In
Commercial Banks In Kenya. Retrieved from
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http://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. Retrieved from
http://www.ramco.com/downloads/WPR-Banking-On-BI.pdf
Tally Solutions Pvt. Ltd. (2013). Tally Banking. Retrieved from
http://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.
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Bibliography
Akrani, G., 2011. Functions of Banks - Important Banking Functions and Services, Available
at: http://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., Estébanez, 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:http://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:
http://chss.uonbi.ac.ke/sites/default/files/chss/ENTERPRISE%20RESOURCE
15

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%20PLANNING%20SYSTEMS%20IMPLEMENTATION%20IN%20COMMERCIAL
%20BANKS%20IN%20KENYA.pdf
Ramco, 2012. Banking on business intelligence, Available at:
http://www.ramco.com/downloads/WPR-Banking-On-BI.pdf
Tally Solutions Pvt. Ltd., 2013. Tally Banking, Available at:
http://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.
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