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.

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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.

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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.

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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.

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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.

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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

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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

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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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