Accounting Information Systems Used in Banking


As a bank manager or CFO, you want to have better control over transactions and provide customers with world-class services. A quality accounting information system, or AIS, can help you do that and much more. This type of software enables users to collect, manage, process, store and retrieve financial data. Furthermore, it generates reports that offer valuable insights about the company's performance. Banks use these systems to manage their own accounts as well as their customers' accounts.

What Are Accounting Information Systems?

Organizations across all industries use accounting information systems to collect and manage financial data and share it with interested parties, such as accountants, auditors, chief financial officers and managers. These software programs track accounting activity and generate comprehensive reports. In general, they are offered by trusted brands like Oracle and Microsoft and can be customized to match your company's needs.

The accounting information systems used in banking convert financial data into accounting information. They are regulated by state and federal agencies to ensure their accuracy and reliability. Decision makers such as CFOs and managers may use this data to streamline their operations, improve customer experience and achieve better financial performance.

There are different types of accounting information systems designed for the banking industry, and each has unique characteristics. General ledger systems, mortgage banking applications and accounting software programs are just a few examples. The type of data collected by AIS may include payroll information, inventory data, general ledger, vendor invoices, sales analysis reports and more.

Loan Accounting Applications

This type of AIS is designed to fully automate the loan life cycle process. It analyzes and processes customer data to determine the creditworthiness of those who apply for a loan. Your employees can simply enter a customer's information into the system and have it processed instead of reviewing each application manually.

Some programs that fall into this category feature advanced solutions for application management, debt collection, loan and lease structuring, loan processing, collateral tracking and more. They can store and process large amounts of data while streamlining regulatory compliance. Since they require a minimal amount of manual work, they can free up employees' time and minimize or eliminate human error.

General Ledger Systems

Like any other business, banks need to manage their accounting entries and financial reports. That's where general ledger systems come in. Often referred to as "the heart of financial accounting," these programs generate detailed reports that include profits and losses, account statements, balance sheets and more according to the accounting rules enforced by each bank.

General ledger systems record each transaction, making it easier to balance your books. At the same time, they identify unusual transactions, which may help prevent fraud. This type of AIS also reduces the need for manual processes and provides the data needed to evaluate the organization's financial status. Communication tools, document management tools and fixed-asset tracking are often included.

Mortgage Accounting Software

This type of software appeals to mortgage banks and brokers. It manages, streamlines and automates mortgage administration tasks, tracking every step of the customer journey, from his first contact with the bank to his final payment.

The most advanced mortgage accounting and administration systems provide key features like credit reporting, contact management, asset management, amortization schedules, loan servicing and trend analysis. These programs can automatically process electronic mortgage applications and track payments. Furthermore, they generate customer and tax statements, allowing for faster data entry and eliminating the need for manual data processing.

These are just a few of the many accounting information systems used in the banking industry. Many financial institutions also employ web-based applications, such as internet banking, customer account applications and other programs that allow for more effective data management and faster computing transactions. These systems minimize the risk of data loss and automate time-consuming tasks while reducing human error.



About the Author

Andra Picincu is a digital marketing consultant with over 10 years of experience. She works closely with small businesses and large organizations alike to help them grow and increase brand awareness. She holds a BA in Marketing and International Business and a BA in Psychology. Over the past decade, she has turned her passion for marketing and writing into a successful business with an international audience. Current and former clients include The HOTH, Bisnode Sverige, Nutracelle, CLICK - The Coffee Lover's Protein Drink, InstaCuppa, Marketgoo, GoHarvey, Internet Brands, and more. In her daily life, Ms. Picincu provides digital marketing consulting and copywriting services. Her goal is to help businesses understand and reach their target audience in new, creative ways.