Question

What would be the software needs for a bank and computer components used to support those software needs?

Thank you!

Answer 1

To answer this question, we must first define what actually a software is. In general, a software is defined as – “a set of instructions defined for a computer or a machine that tells the computer how to compute a particular task as per user specification.” In short, a software is a black box that performs set of instructions on a predefined data, so as to give an output based on user preference. The output however may vary from a tabular representation, to a graph or a visualization of some sort as per user demand.

Now, banking on the whole might be categorized into retail banking and investment banking. Retail banking is a form of mass banking where each individual opens up an account into a branch of a larger commercial bank. More than the quantity of money itself it is focused on the number of people opening account in such banks. Where as on the other hand, investment banking is more or less focused on high net worth individuals i.e.: the quantity of money instead of number of people opening account on the commercial banks. It more or less focuses on the creation and management of wealth for such individuals. However, we must understand that whether be it an retail banking system or a investment banking, the bank by itself is dealing with a large amount of account holders and account holder’s money. As such each of the transactions must be meticulously maintained and missing even one of which might be disastrous. As such the banking system must use some sort of software to keep track of them. Hence most banks use some software to maintain the account holder’s and transaction details.

Now let us see where and how a banking system might use software and what might be the software needs for a bank :

1. Personal account details management: A bank has to maintain details about its customers. So as to authorize each and every transaction that might occur from that particular account and no frauds might occur. This might include keeping his registered email, mobile number, photograph, address among many other details.
2. Transaction records maintenance: The banks needs a database system to keep track of the transactions that an individual has triggered, so as to keep track of the account balance at any moment. As such they need a well-maintained database system to keep track.
3. Mobile/Web based banking: In today’s age no one goes to the bank to perform any transaction, instead each and everyone performs transactions via the online banking platforms or the mobile apps provided by banks. As such, banks require both software and hardware to facilitate this process.
4. Security software: Today we all are well aware of the risk that trojans, viruses and hackers pose to the banking sector and how malicious that they can be for a wealth management organization. Hence every bank maintains a well updated security system to act as a barrier between the system and these malicious agents.
5. Customer on-boarding: Today the banks even uses interactive software to onboard the customers. This not only facilitate the customer but also the bank as it helps them to reduce the manual effort required to onboard.
6. Portfolio management: Most banking sectors today provides the option to maintain your portfolio based on your risk appetite. They mostly use previous years data model on an artificially intelligent model to determine what sectors might interest the customer and might prove beneficial for them. This is an automated process. Hence once again, the banks can reduce the efforts required on analysis and predictions.
7. Cash deposit/withdrawals, money transfers, etc.: Each and every bank has the option to have cash withdrawals and deposits, money orders, transfers. As such they maintain a software to maintain the records of the individuals as well as the amounts they are depositing, withdrawing or transferring.

The computer components required to maintain the above software requirements are as follows :

1. End user systems: An end user system required to run the above system is required by all banks.
2. Servers for data storage: Banks require the data being saved by the database management systems to be stored somewhere. As such they need large servers to store this data.
3. Servers for hosting services: Most banks does not host their online banking systems or mobile banking in public servers. They maintain their own private servers to host the services and hence much more secured.
4. Fingerprint scanners: Though not very common some banks are known to keep track of fingerprints of account holders for verification. As such they must have the scanners to scan the fingerprints.
5. Mobility(connectivity) services: A bank must have well defined connectivity/mobility services to connect with other banking servers over intranet or internet so that the transactions might go through when initiated by the customers.

So, these are the software needs for a bank and the hardware requirements to support the software requirements.