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Table of Contents
Introduction 2
E-business 3
Reason to choose BRAC bank 4
Organization profile 5
Available Software of BRAC Bank Limited 6, 7&8
BRAC BANK Network Map 9
Business Processes 10 Traditional Banking 10 The use of ATMs and CDMs 10 SMS Banking 10 Online Banking 11 Decision Making 11 Communication 11
BRAC bank E-Business 11, 12&13
E-Banking Components 14, 15
E-Banking Support Services by BRAC BANK 16
Web linking 16
Account Aggregation 16
Electronic Authentication 17
Payments for E-Commerce 17
Bill Payment and Presentment 17
Recommendation 19
Conclusion 20
1
Introduction
An Information System (IS) means an interconnected set of information resources under
the same direct management control that shares common functionality. A system
normally includes hardware, software, information, data, applications, communications,
and people. In simpler terms Information System is an electronic system for creating,
generating, sending, receiving, storing, displaying, and processing information.
Information Systems can be designed for storage and dissemination of a variety of data
products, including primary data sets and both intermediate and final analyses, and for
an interface providing connections to external computers, external data banks, and
system users. To be effective, the design and operation of an information system must
be carried out in close association with the primary producers of the data sets, as well
as other groups producing integrated analyses or intermediate products. It enables firms
to communicate and use analytic tools for commencing trade and managing businesses
on a worldwide scale. Information must be reliable, relevant, timely, complete, and
understandable. After the industrial information age, the focus of companies has shifted
from product oriented to knowledge oriented, which is competing in terms of process
and innovation, rather than the product itself.
The biggest asset of companies today, is their information, represented in people,
experience, know-how, innovations, and for a market operator to be able to compete,
he/she must have a strong information infrastructure, at the heart of which, lies the
information technology infrastructure. Thus, the study of information system focuses on
why and how technology can be put into best use to serve the information flow within an
organization.
Information became the key element for corporate success, especially in the last
decade. Twenty first century is the dawn of information technology, where the banking
sector in Bangladesh has boomed. With the goal of obtaining world-class banking
services, banks are fully dependent on IT, with upcoming and already in process
systems like SMS, online, phone, and internet banking, with various products like debit
and credit cards for students, entrepreneurs, and executives of various levels.
2
E-BusinessE-Business may be defined as the application of information and communication
technologies supported all the activities of business. Electronic business methods
enable companies to link their internal and external data processing systems more
efficiently and flexibly, to work more closely with suppliers and partners, and to better
satisfy the needs and expectations of their customers. E-business refers to more
strategic focus with an emphasis on the functions that occur using electronic
capabilities. E-business involves business processes spanning the entire value chain:
electronic purchasing and supply chain management, processing orders electronically,
handling customer service, and cooperating with business partners. Special technical
standards for e-business facilitate the exchange of data between companies. E-
business software solutions allow the integration of intra and inter firm business
processes. E-business can be conducted using the Web, the Internet, intranets,
extranets, or some combination of these.
When bank do their business through intranet, extranet and internet, it is called e-
banking. E-banking is basically the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive
communication channels. E-banking includes the systems that enable financial
institution customers, individuals or businesses, to access accounts, transact business,
or obtain information on financial products and services through a public or private
network, including the Internet.
3
REASONS TO CHOOSE BRAC BANK
Banking service is one of the fastest growing service industries of our country. Among
many other local and foreign banks we have decided to choose BRAC bank. Our
reasons behind choosing this particular company are given below:
1.Highly improved and efficient use of technology
Modern banking requires very sophisticated technical support and information system.
BRAC bank can be a role model in our country for other private banks as it uses a very
sophisticated expensive banking solution system (Finacle) in our country. At the same
time it uses its resources very efficiently and continuously updating its technology
infrastructure. Currently it has about 112 ATM units and 25 CDM units throughout the
nation for customer support.
2.Growing fast
BRAC bank is one of the fastest growing private banks in our country. In fact is has one
of the biggest banking network throughout the nation and it also continuously trying to
expand and improve its service network. Since inception in July 2001, the Bank's
footprint has grown to 56 branches, 30 SME Service Centers, 427 SME unit offices and
112 ATM sites across the country, and the customer base has expanded to 465,000
deposit and 187,000 advance accounts till December 2008.
3.One of the pioneers in modern banking in Bangladesh
Modern banking using state of the art information systems in private sector is not very
old in our country. It has started just a few years back. BRAC bank is one of the first
private banks in Bangladesh practicing modern banking system and high quality
customer service.
4
Organization Profile
Corporate Vision of BBL:
"Building a profitable and socially responsible financial institution focused on Markets
and Business with growth potential, thereby assisting BRAC and stakeholders build a
just, enlightened, healthy, democratic and poverty free Bangladesh".
With institutional shareholdings by BRAC, International Finance Corporation (IFC), and
Shore cap International, BRAC Bank Limited has been the fastest growing bank in 2004
and 2005. BBL, a fully commercial bank, focuses on pursuing unexplored market niches
in the small and medium enterprise businesses, which till now has remained largely
untapped within the country.
Company Overview:
BRAC Bank Limited, a full-service commercial bank with Local and International
Institutional shareholding, is primarily driven by creating and pursuing market niches not
traditionally met by conventional banks. BRAC Bank has been striving to implement
‘Relationship Banking” to its diverse range of customers spread across the country
under an on-line banking platform. The Bank work with governments in developing
countries around the world, assisting people in all areas of development, from policy
and strategic advice to the identification, preparation, appraisal and supervision of
development projects. The Bank is always actively involved in financial sector
restructuring and regulatory work, continuing to help nations move towards market-
based economies through financial sector restructuring, infrastructure development,
privatization and regulation.
Special efforts are being made to expand activities in the field of education, such as
early childhood development and girls' education. The Bank is deeply committed to anti-
corruption initiatives for a better global society.
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The business goals and objectives were to spread and ensure efficient, high quality and
reliable banking services by increasing access to economic opportunities for all
individuals and businesses in Bangladesh with a special focus on underserved
enterprises and households across the rural–urban spectrum and at the same time
contributing towards the profitability of the bank.
Available Software of BRAC Bank Limited
BBL is using a huge number of complex software and hardware to enable the day to
day transaction to become very comfortable to the staff body. Most of the software is
related to IS of the IT department, who are always struggling to make the automated
information system flawless.
The available list of software that is used in the information system are as follows:
Finacle: BRAC Bank uses a organization wide enterprise application software
named Finacle Core Banking Solution which is provided by Infosys Technologies Limited. It is a comprehensive, integrated yet modular business
solution that effectively addresses the strategic and day-to-day challenges faced
by banks.
Oracle: Their database is centralized. The central database of BRAC Bank is
made by Oracle. All the information of the organization (e.g. customer
information, employee information, company assets, transactions data etc.) is
stored in the central database which is connected with every branch, office, ATM
and CDMs throughout the country.
Access: This software is mainly used for ATM card embossing and PIN mailer
generation. It is externally imported software.
CardPro: This system is used to manage credit card operations and Merchant
POS etc. It is external system bought by BBL.
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E- FLOW: It is the part of BBL’s paperless project, used for all types of
stationary requisition, is developed internally.
Eldorado: It is the Remittance Processing system, developed and maintained
by internal resources.
IB (Internet Banking): it is the Internet banking module. Currently developed
and managed by internal resources.
Kastle: It is the loan pre processing system, which helps to screening loan
processing. It is a part of the externally purchased system by the bank.
MISTERSYS: It is used for keeping all MIS internally.
Nexus: This software is used for Credit Card Embossing and PIN generation.
With the help of this software the bank embosses new and replaced credit cards and
their respective PINs. It is also externally imported software.
Phoenix: This software is used for ATM Management. Currently BBL has over
110 ATMs. It is also externally imported software.
XCRV: It is internally developed customer relationship viewer.
E-Attendance: This is the automated maintenance software electronically
tracking of attendance of the total BRAC Bank employee. With the help of this software
the employees log in with the PIN no when they enter in their office and exit their office.
Card Cheque Live: It is the main software to process the card cheque.
E – Statement viewer: With the help this software the account statement is
shooting to the e mail addresses of the account holders. It saves huge courier cost of
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the bank and safely assures the delivery of the statement of the account holder
electronically. It is developed and managed by the internal IT team.
TEAM: With this software the authority keep tracking of their overall
procurement of big items such as PCs, printers, servers, UPS and others valuable
resources. It is the most recent and latest development software created and managed
by the internal resource of BBL.
Every branch has some computers that are interconnected with a LAN connection. All
the branches, ATMs and CDMs are connected with the central database by a WAN
network which is connected with the global internet. The network is protected by a
firewall so that any private information cannot be leaked outside. There are also outside
service providers like the telecom companies for the SMS banking service who are also
connected with the network. The technologies that are used by BRAC Bank as the
medium of data communications-
1. Fiber-optic cable.
2. Radio. 3. VSAT (Very Small Aperture Terminal) technology. It is a type
of satellite technology that is commonly used to transmit
narrowband data (e.g. point of sale transactions such as
credit card, ATMs).
They also have the latest PCs, network hubs, modems, high-end router, high-end
switch, HP Server, SAN, DAS, NAS and Backup Media, security device (Cisco PIX
Firewall), Fiber-cabling for LAN, mostly powered by Flora Limited.
8
Figure: BRAC BANK Network Map
9
Business Processes
After the implementation of Finacle which is an enterprise application system, many of
the banking related business processes of BRAC Bank has become automated except
the processes in which human involvement is needed to give input in the system. The
business processes that are mostly or partially dependent on the information system
are-
1. Traditional Banking- Opening any type of account for a customer, depositing
money, withdrawing money, allowing loans, interest and rate calculation, currency
exchange rates calculation, issuing credit and debit cards, wealth management etc.
They have a computerized form for it which the customer fills out and the data is
entered from that.
2. The use of ATMs and CDMs- In modern banking system, withdrawing money
from the ATMs and depositing money with a CDM (Cash Deposit Machine) has become
one of the most popular trends.
3. SMS Banking- SMS banking is a relatively new idea in our country. It is used on a
small scale by BRAC Bank Ltd. The services are provided through SMS with the help of
telecom companies. BRAC Bank provides the services given here-
Instant Account Balance & Mini Statement
High Value Transaction Alert
Account status change alert
Welcome alert (for account opening)
Payment (loan) failure alert.
Cheque clearing failure alert
Fixed Deposit Maturity Alarm.
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4. Online Banking-Online banking is a process in which a customer does not have to
go to a specific branch in order to withdraw money from his account. In this service
he/she can go to the branch or ATM (24/7) booth nearby his home or working location
and withdraw money. Previously a customer had to go to a specific branch in order to
withdraw money.
5. Decision Making-Every bank has to take decisions often on financial matters. As
all of the financial information is stored in the database, the bank is very much
dependent on information system in taking financial decisions.
6. Communication-Any type communication, interpersonal as well as data
transmission for transactions information, is heavily dependent on information systems.
BRAC bank E-Business
Customers can access e-banking services using an intelligent electronic device, such
as a personal computer (PC), personal digital assistant (PDA), automated teller
machine (ATM), or Telephone. While the risks and controls are similar for the various e-
banking access channels, this report focuses specifically on Internet-based services
due to the Internet’s widely accessible public network. Accordingly, this report begins
with a discussion of the two primary types of Internet websites: informational and
transactional.
Informational WebsitesInformational websites provide customers access to general information about the
financial institution and its products or services. Risk issues should be considered when
reviewing informational websites include:
Potential liability and consumer violations for inaccurate or incomplete
information about products, services, and pricing presented on the website;
Potential access to confidential financial institution or customer information if the
website is not properly isolated from the financial institution’s internal network;
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Potential liability for spreading viruses and other malicious code to computers
communicating with the institution’s website; and
Negative public perception if the institution’s on-line services are disrupted or if
its website is defaced or otherwise presents inappropriate or offensive material.
Transactional WebsitesTransactional websites provide customers with the ability to conduct transactions
through the financial institution’s website by initiating banking transactions or buying
products and services. Banking transactions can range from something as basic as a
retail account balance inquiry to a large business-to-business funds transfer. E-banking
services, like those delivered through other delivery channels, are typically classified
based on the type of customer they support. The following table lists some of the
common retail and wholesale e-banking services offered by financial institutions.
Table 1: Common E-Banking Services
Retail Services Wholesale Services
Account management Account management
Bill payment and
presentment Cash management
New account opening Small business loan
applications, approvals, or
advancesConsumer wire transfers
Investment/Brokerage
servicesCommercial wire transfers
Loan application and
approval
Business-to-business
payments
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Account aggregationEmployee benefits/pension
administration
Since transactional websites typically enable the electronic exchange of confidential
customer information and the transfer of funds, services provided through these
websites expose a financial institution to higher risk than basic informational websites.
Wholesale e-banking systems typically expose financial institutions to the highest risk
per transaction, since commercial transactions usually involve larger dollar amounts. In
addition to the risk issues associated with informational websites, examiners reviewing
transactional e-banking services should consider the following issues:
Security controls for safeguarding customer information;
Authentication processes necessary to initially verify the identity of new
customers and authenticate existing customers who access e-banking services;
Liability for unauthorized transactions;
Losses from fraud if the institution fails to verify the identity of individuals or
businesses applying for new accounts or credit on-line;
Possible violations of laws or regulations pertaining to consumer privacy, anti-
money laundering, anti-terrorism, or the content, timing, or delivery of required
consumer disclosures; and
Negative public perception, customer dissatisfaction, and potential liability
resulting from failure to process third-party payments as directed or within
specified time frames, lack of availability of on-line services, or unauthorized
access to confidential customer information during transmission or storage.
13
E-Banking ComponentsE-banking systems can vary significantly in their configuration depending on a number
of factors. Financial institutions should choose their e-banking system configuration,
including outsourcing relationships, based on four factors:
Strategic objectives for e-banking;
Scope, scale, and complexity of equipment, systems, and activities;
Technology expertise; and
Security and internal control requirements.
Financial institutions may choose to support their e-banking services internally.
Alternatively, financial institutions can outsource any aspect of their e-banking systems
to third parties. The following entities could provide or host (i.e., allow applications to
reside on their servers) e-banking-related services for financial institutions:
Another financial institution,
Internet service provider,
Internet banking software vendor or processor,
Core banking vendor or processor,
Managed security service provider,
Bill payment provider,
Credit bureau, and
Credit scoring company.
E-banking systems rely on a number of common components or processes. The
following list includes many of the potential components and processes seen in a typical
institution:
Website design and hosting,
Firewall configuration and management,
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Intrusion detection system or IDS (network and host-based),
Network administration,
Security management,
Internet banking server,
E-commerce applications (e.g., bill payment, lending, brokerage),
Internal network servers,
Core processing system,
Programming support, and
Automated decision support systems.
These components work together to deliver e-banking services. Each component
represents a control point to consider. Through a combination of internal and
outsourced solutions, management has many alternatives when determining the overall
system configuration for the various components of an e-banking system. However, for
the sake of simplicity, only two basic variations are presented here.
First, one or more technology service providers can host the e-banking application and
numerous network components as illustrated in the following diagram. In this
configuration, the institution’s service provider hosts the institution’s website, Internet
banking server, firewall, and intrusion detection system. While the institution does not
have to manage the daily administration of these component systems, its management
and board remain responsible for the content, performance, and security of the e-
banking system.
Second, the institution can host all or a large portion of its e-banking systems internally.
A typical configuration for in-house hosted, e-banking services is illustrated below. In
this case, a provider is not between the Internet access and the financial institution’s
core processing system. Thus, the institution has day-to-day responsibility for system
administration.
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E-Banking Support Services by BRAC BANKIn addition to traditional banking products and services, financial institutions can provide
a variety of services that have been designed or adapted to support e-commerce.
Management should understand these services and the risks they pose to the
institution. This section discusses some of the most common support services: web
linking, account aggregation, electronic authentication and payments for e-commerce.
Web linking
BRAC bank maintains their sites on the World Wide Web. Through web linking BRAC
bank offer their customers to perform financial transactions, such as paying bills or
transferring funds between accounts. A web link is a word, phrase, or image on a
webpage that contains coding that will transport the viewer to a different part of the
website or a completely different website by just clicking the mouse.
Account Aggregation
BRAC bank use account aggregation which is a service that gathers information from
many websites, presents that information to the customer in a consolidated format, and,
in some cases, may allow the customer to initiate activity on the aggregated accounts.
The information gathered or aggregated can range from publicly available information to
personal account information (e.g., credit card, brokerage, and banking data).
Aggregation services can improve customer convenience by avoiding multiple log-in
and providing access to tools that help customers analyze and manage their various
account portfolios. For account aggregation customer needs-
1. Users ID
2. passwords to sign in
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Once the customer’s account is accessed, the aggregator copies the personal account
information from the website for representation on the aggregator’s site.
Electronic Authentication
Verifying the identities of customers and authorizing e-banking activities are integral
parts of e-banking financial services. Since traditional paper-based and in-person
identity authentication methods reduce the speed and efficiency of electronic
transactions, financial institutions BRAC bank have following authentication methods,
including:
1. Passwords and personal identification numbers (PINs),
2. Digital certificates using a public key infrastructure (PKI),
3. Microchip-based devices such as smart cards or other types of tokens,
Database comparisons (e.g., fraud-screening applications).
Payments for E-Commerce
BRAC bank accepts various forms of electronic payments for their products and
services. Financial institutions play an important role in electronic payment systems by
creating and distributing a variety of electronic payment instruments, accepting a similar
variety of instruments, processing those payments, and participating in clearing and
settlement systems. The electronic payments mechanisms that BRAC bank provides for
e-commerce are automated clearing house (ACH) debits and credits through the
Internet, electronic bill payment and presentment, and electronic credit card payments.
Bill Payment and PresentmentBill payment services permit customers to electronically instruct their financial institution
to transfer funds to a business’s account at some future specified date. BRAC bank
customers can make payments on a one-time or recurring basis, with fees typically
17
assessed as a “per item” or monthly charge. In response to the customer’s electronic
payment instructions, BRAC bank generates an electronic transaction – usually an
automated clearinghouse (ACH) credit – or mails a paper check to the business on the
customer’s behalf.
Internet-based cash management is the commercial version of retail bill payment.
Business customers use the system to initiate third-party payments or to transfer money
between company accounts. Cash management services also include minimum
balance maintenance, recurring transfers between accounts and on-line account
reconciliation.
To mitigate risks the bank authority recommended the following DOs and DON’Ts for
their E Banking customers:
DOs:
Use anti phasing browser, i.e. Internet Explorer 7, Netscape 8.1, Firefox
Use a secured website while submitting any sensitive financial information
Use POP UP Blockers
Be suspicious of any of these sorts of e-mail and message
Regularly check Bank, Credit Card and Debit Card Statement, Report if
suspicious transactions are found
Regularly change password and PIN
Call Financial Institutes if receive any e-mail that request to enter any security
information
Check Digital Signature
Log off as soon as finish online banking
Take a close look at the hyperlink are clicking
DON’Ts:
Do not leave logging on online banking facility
Do not share PIN and Password with anyone
Do not save username and password in the browser
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Do not enter any security information over the Internet
Avoid using cyber cafes and other public places for logging on to banking
system
. Do not use the links send via e-mails and messages to get to any web
site
RECOMMENDATIONS
We have already discussed about the types of information systems BRAC bank is
using. We have to agree that the information system they are using is quite
sophisticated. But there is always room for improvement. To stay in the competition
BRAC bank must continuously update and implement new technologies. Because
competitors like DBBL, Mercantile, EBL, South-East, Dhaka Bank already posses’
technologies like BRAC bank and they are always looking to bring new technologies
into the market.
Our recommendations regarding the company’s use of information system and e-
banking would be:
The company should update their websites daily and maintain their security more
precisely.
They should adopt the correct business model that ensures the most productivity
from their information systems.
The Finacle suite is for only banking solutions. But there are also other functions
of a company like supply chain management, customer relationship
management, organization’s fixed assets management, procurement etc. So
after doing marginal analysis, they can implement systems like CRM or SCM
depending on the necessity as the organization grows larger.
In order to monitor the Key Performance Indicators (KPI), the company can
implement KMS systems which are business intelligence systems that support
decision making. Every large organization set some Key Performance
19
Indicators (KPI) which are financial and non-financial measures used to help an
organization define and evaluate how successful it is.
Proper coordination of all types of information systems must be ensured.
If such improvements are brought in then we can expect BRAC Bank to be completely
‘digital’ very soon. Also from MIS perspective, their approach shall be seen as an idol to
follow. They have already utilized many opportunities offered by IS; now it is a challenge
for them to maintain this structure and explore further. We hope BRAC Bank will lead
the way for other companies to exploit these booming fields of IT.
CONCLUSION
There have been significant changes in the way economic activity has been organized
since the inception of large-scale investment in information technologies like computers
and others. In this paper, we tried to add by showing how the nature of the firm can
provide insight into the mechanisms by which information technology influences
organizational structure in terms of BBL with the intention of getting some operational
lacking and giving them with solutions.
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Reference
1. Mr. Ekramul Haque Chowdhury, Analyst, Technology user
Infrastructure, IT Division, BRAC Bank Ltd.
2. Mr. Ashraful, IT Division, BRAC Bank Ltd.
3. www.bracbank.com.
4. www.finacl.com.
5. Management Information Systems 10th Edition, Kenneth C. Loudon and
Jane P. Loudon.
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