IT and Finance
DBF II
Content
Introduction to IT
Introduction to Finance
Application of IT in Finance
Banking Sector
Insurance Sector
Investment Sector
Income Tax Sector
Advantages of IT
Limitations
Merits and demerits
References
Introduction
Information Technology
A branch of engineering that deals with computers and telecommunications equipment to store,
retrieve, transmit and manipulate data
Use of computers and software to manage
information. E.g. Storing, protecting, processing,
transmitting and retrieving the information in a
large organization
Contd..
Finance
The science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities.
Finance can also be defined as “the science of
money management”
Need of IT in Finance
Applications of IT in Finance
Banking Sector
Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before - thus creating new bases of competition
Core banking
• Core Banking Solution (CBS) is networking of branches
• Enables customers to operate their accounts and avail banking services from any branch of the Bank on CBS network, regardless of where he maintains his account
Applications
Remote banking
• Remote terminals at the customer site connected to the respective branch through a modem, enabling the customer to make inquiries regarding his accounts on-line, without having to move from his office
Anytime banking- Anywhere banking
• Installation of ATMs
• Electronic fund transfer (EFT)
• Remittances
• Inquiry facilities
Applications
Telebanking
• A 24-hour service through which inquiries regarding balances and transactions in the account can be made over the phone
Debit/Credit Cards
• Debit card (also known as bank card or check card) is a plastic
payment card that provides the cardholder electronic access to his or her bank account(s)
• May bear a stored value with which a payment is made
• Credit card is a credit facility that enables to buy things up to a pre-arranged limit, and pay for them at a later date
Applications
Insurance Sector
A.
Life Insurance Application
Life Administration Module
Statistics and MIS claims
Archiving of historical data and imaging Systems
Applications
B.
General Insurance Applications
Front Office System
Policy Management and underwriting system
Co-insurance
Reinsurance
Financial accounts and audit
Risk Management System
Applications
Investment Sector
Get real time stock quotes, Indian and Global market Indices
Manage and track Investment Portfolio
Get in-depth coverage of financial markets, economy and business
Track currencies and commodities
Buying and selling of shares
Applications
Income Tax Sector
Managing enrollment of new payees
Collection of taxes
Finding the defaulters
Applying new regulations
Applications
Personnel system
Payroll system
Performance Appraisals
Attendance and leave system
Applications
Office Services
Purchases
Inventory
Tours and Travels
Corporate Accounting System General Insurance
Advantages of IT in finance
Improved Decision Making
• Use of real time data
• Better understanding
• Cost reduction and process improvement
Competitive Advantage
•
Doing things better than the competitors
•
Charging less
Contd..
Survival
• Implementation by the firms to stay in business
Globalization
• Share information
• linguistic and geographic boundaries
• Brought the world closer together
Contd..
Cost effectiveness
• Streamlining businesses
• Increase in productivity
Time effectiveness
• Businesses to be open 24 x7 all over the globe
• Purchases became easier and more convenient
Limitations
Bugs
• A bug is an error, flaw, failure, or fault in a computer program or system that causes it to produce an incorrect or unexpected result
• Most bugs arise from mistakes and errors made by people in
program’s source code
Frameworks and operating systems
• Compilers also produce bugs
Limitations
Computer Viruses
A computer virus is a malware program that replicates itself to affect the system
Network Vulnerability
•
Modification of message
•
Denial of service
•
Eavesdropping
Merits and demerits of IT
Globalization
Communication
Cost effectiveness
Bridging the cultural gap
Creation of new jobs
Unemployment
Lack of job security
Privacy
Dominant culture
