Integration of erp in banking sector
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The document discusses ERP systems in banking. It defines ERP as a software that allows organizations to integrate applications to manage business processes and back office functions. The benefits of ERP for banks include improved efficiency, productivity, costs savings, and customer service. It provides an example of how ERP streamlines processes in a bank called Bank Audi, allowing information to flow seamlessly between departments like finance, accounting, and customer service.
Integration of erp in banking sector
- 2. Content ERP Banking Sector ERP in “Bank Audi”
- 3. Before introduction of ERP Each department had their own system Complex way of communication
- 4. ERP Definition Enterprise Resource Planning (ERP) is a business process management software that allows an organization to use a system of integrated applications to manage the business and automate back office functions
- 5. Objectives of ERP Drive the flow of information Track business resources (cash, raw materials, production capacity) Track business commitments(orders, purchase orders, and payroll)
- 6. Benefits of ERP Improve quality and efficiency of the business. Higher productivity Lower cost Improve customer service Increase sales Less time
- 7. Bank Banks are financial institutions and financial intermediaries that are a fundamental component of the financial system, and are also active players in financial markets A bank accepts deposits and channels those deposits into lending activities Lending activities can be either directly by loaning or indirectly through capital markets A bank links together customers that have capital deficits and customers with capital surpluses Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations
- 8. Standard activities of a bank Banks mainly act as payment agents by: Conducting checking or current accounts for customers Paying cheques drawn by customers on the bank Collecting cheques deposited to customers' current accounts Other methods of payment are : Automated Clearing House (ACH) Wire transfers or telegraphic transfer EFTPOS Automated teller machine (ATM)
- 9. Banks borrow money by : Accepting funds deposited on current accounts Accepting term deposits Issuing debt securities such as banknotes and bonds Banks lend money by: Making advances to customers on current accounts Making installment loans Investing in marketable debt securities and other forms of money lending
- 10. Types of Banks: Banks' activities can be divided into: Retail banking: dealing directly with individuals and small businesses Business banking: providing services to mid-market business Corporate banking: directed at large business entities Private banking: providing wealth management services to high net worth individuals and families Investment banking: relating to activities on the financial markets
- 11. Commercial banks: A commercial bank is a type of retail bank that provides services to individuals, by: Accepting deposits Making business loans Offering basic investment products It can also refer to a bank or a division of a bank that provides these services to corporations or large businesses, as opposed to individual members of the public
- 12. Commercial banks engage in the following activities: Processing of payments by way of telegraphic transfer, EFTPOS, internet banking, or other means Providing documentary and standby letter of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures Safekeeping of documents & other items in safe deposit boxes Sales, distribution or brokerage, with or without advice, of: insurance, unit trusts and similar financial products as a “financial supermarket” Cash management and treasury’ Merchant banking and private equity financing
- 13. Traditionally, large commercial banks also underwrite bonds, and make markets in currency, interest rates, and credit-related securities, but today large commercial banks usually have an investment bank arm that is involved in the mentioned activities.
- 14. Bank Is a Retail Bank Retail banking is when a bank executes transactions directly with consumers, rather than corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.
- 15. Main Department of NDB Accounting department : Includes the Expenditure Budget, Human Recourses Department : The main function of the Cash Operation Department Financial System, Core Banking and Client Management Divisions. Human Resources Department is to assist employees through their life cycle at the bank and even after retirement in order to bring out the best of their potential and thus contribute to the success and stability of the bank.
- 16. Payment System Department : Responsible for performing and overseeing all kinds of operations in the National Payment System such as clearing and settlement of cheques and cards transactions. Training and Development Department: Main Functions of this department is to : 1. Organize conferences, seminars and training programs on monetary and banking issues. 2. Organize training courses to improve staff efficiency.
- 17. When a customer asks for a loan… Request taken by the clerk at the office (CRM) Request will be sent to the finance department Once approval takes place, info automatically goes to accounting department to record the borrowing in the balance sheet Also another info will be sent to the customer service, to inform the customer of the approval
- 18. Days goes on… Paying monthly interest. Automatic info will be sent to : Finance department Accounting department Payment system department