Different components comprise a bank accounting information system. Bank systems are classified as “hybrid” systems, which provide basic accounting operations, bank information systems decision support software, offline banking products (insurance, business financial management plans) implemented and initiated on intra-office networks to serve customers. Bank accounting systems are under state and federal regulatory agencies to ensure the accuracy and integrity of bank accounting systems.
General Ledger Systems
The general ledger is at the core of account processing and information systems in banking. The general ledger is the record accessed to perform account transactions. It records every transaction, which interfaces with a designation of accounts. A bank general ledger can be slightly different from modern industry general ledgers because of certain compliance rules set forth by the Federal Reserve Bank (FRB) and the Federal Deposit Insurance Corporation (FDIC). Banking general ledger systems operate on mid-range software, which can be turnkey software--out of the box software customized for banking industry applications.
Loan Accounting Applications
Banks make the majority of their money through loans and investments. Through loan accounting software, bank personnel can process the forms and paperwork needed to make a decision on a customer’s credit standing. The managerial side of a loan accounting application is managers can access data to examine the bank loan portfolio, generate compliance checks for auditors and track loan loss reserve accounts. Loan origination software can interface with an accounting information system through most PC-based systems.
Mortgage Banking Applications
For banks in the mortgage industry, mortgage bank application modules create and maintain information according to mortgage loans provide by banks to its customers. The mortgage information system generates customer statements, tax statements for federal and state tax offices, and creates an escrow account for mortgages on the banks portfolio. On the general ledger, mortgage bank accounts consist of several sub-account layers reflecting taxes, actual value of the mortgage, assessed value of the mortgage and other variables.
Customer Account Applications
Customer account applications provide unique primary key identifiers to link customer information to an account number assigned by the information system during a creation of the account. The customer account is maintained on the system and referenced by account number, which is held in a field on the general ledger. The customer account number is the link for customers to interact with online and offline banking system applications. Customer account information is also the basis for transaction exception reporting for various customer account issues.
Internet Banking Applications
The latest evolution in banking information systems are web-based applications that support Internet banking. Internet banking programs interface with accounting information system through a web server or portal with the website or page performing the role as a template or “point of access.” Through secure web-servers, customers can perform actions, which can affect, update or change general ledger status. Management analyzes reports pertaining to Internet banking, such as how many customers are using the Internet for deposits, transfers and access other banking products. Internet banking applications are also used for the online marketing of bank products through marketing software created for bank institutions.
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