Growth in computer knowledge has rapidly expanded during the last two decades coupled with reduction in the cost of computers in the market, has make it easy for bank to communicate, interchange information and knowledge more easily and efficiently. The introduction of computers in the banking sector has changed the operational system of banks from branch and paper work to the digital and network banking system. From the management to the accounting sector, computers have come as a tool to breakdown the bulk of work formerly done manually. The environment as a whole has changed from the way transactions are done and the variety of products and services has as well changed so to meet up with this change the banking sector saw a need to integrate into the information technology world to ameliorate customer services.
Bank transformation by technology
With the rate of change in the society, consumers expectation from the services rendered by the banks keep increasing and the computers have given to the banking sector an operational power they could only dream of two decades back. The impact of the computer in the banking sector can be seen to affect the three different actors concerned namely the officers, consumers and employees of the bank. Speed in the execution of transaction towards a customer and rapid information access to account details are the attributes or power the computer has given to the banking sector which makes their success today. Added advantages like online transfers and transactions have made the bridge between the customer and the market shorter thanks to the computerized banking system.
- The consumer: the flexibility of the bank in the services it offers is dependent upon the habits of the consumer. The introduction and amelioration of technological advancement changed the way in which consumers viewed the world and as a consequence an adaptation was expected from the banking sector and as banks competed on better customer services they turn to use this tool called technology through the computer and introduced services like;
self-inquiry facility, this is possible as the customer is able to see details about transactions processed from his account just by logging in through the terminal of one of the bank’s branch without visiting the bank.
Anytime banking, computer systems have permitted the creation of the ATM machine that permits with draw from any branch within and between cities and even between different banks around the globe for example the use of VISA and Master’s Cards. Furthermore, the banks have made it possible to shop using these credit cards which is a more secured way to live in the society people no longer have to move about with large amounts of money to shops to purchase goods.
Telebanking, this is a facility provided by the bank towards the customer through which transaction and inquiries about account are made available through their mobile phones.
E-banking, customers who execute large and regular transactions can be provided with Graphical User Interface (GUI) software on their PC, this will save them time by permitting them to access information about their account balance, financial transactions, cash transfer and inquiries on exchange rates and check books. Similarly, the bank provides Electronic data interchange (EDI) services which permits the exchange of information between organizations and individuals about business transactions in form that is readable by a computer.
- The employee. The efficiency and productivity has been enhanced by the introduction of the IT system in the banks. It is used to reduce the amount work on activities like balancing and calculating interest on due dates.
Computers permit automatic services like printing of receipt, covering schedule, pass books thereby reducing the amount of time the employee had to do these jobs which are time consuming and they turn to pay more attention to the customer. All the data enter along one terminal or a single-point entry so, fraud like document duplication can easily be avoided.
- For the bank. IT has been utilized in the banking sector over a broad array of task both front and back office task and security services in addition to new products. The introduction of computer into the banking system has help the band to develop their horizon by introducing new services (mobile banking, ATM cards) and customer follow up has become easier. There is better communication between banks within and between countries services like Western Union permit the transfer of funds from one country to another.
In a computer system there is the possibility of updates in the account of the customer automatically as he does different transactions during the day, in the case of a misunderstanding in the details of account transaction by the customer immediate replies are made possible in a brief period as compared to when references had to be made from ledger-keepers.
When customers have a standing order such as rent or a mortgage, the bank can automatically carryout this standing order on the date that is due and make reports easily.
The relationship between different branches of the same bank has been made easier so that the transfer of up-to-date information on a customer can be made in case the consumer, leaves from the branch where he created the account to another branch to collect a loan the decision to issue him the loan is speed up as the bank has computerized its system making them more efficient. Also video and audio conferences for easy decision making are made possible within branches of a bank thanks to the computer system.