The Effects of Electronic Data Processing in Community Banks

The Effects of Electronic Data Processing in Community Banks

This work piece cannot be successfully without research for more fact through secondary method of data collections on the process, we consulted many texts both published and unpublished.  There are so many writers in data processing and accounting who contribute to the keenness of the study of accounting as a discipline. Based on the ascertain that “many are chosen” we cannot reflected the books consulted in the write-up.In this bid, the data fed into the computer can be expurgated, mutilated and changes.  But with the advent of mini-computer with the advent of mini-computer with mammoth of silicon chips of 120 inches each the black mails do not hold water Hanld (1995-115-120).

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Millichap (2000) postulated that: “The electronic data processing system in banking is advantages on the ground that processing, dissemination of information and sorting of raw (Data) information are made faster and easier”.

This means that electronic processing system fastens processing and reliable when the rightful data are fed into the computer that is Gabbage-in-Gabbage-out.  It was also back man on the ground that it is costly to install and that the system takes blank box approach.

Millichap (2000) also said that in the course of procession of data, he divided the process into input processing and out putting in the processing, he said that:

“The hardware that master minds the process is the control unit and the Arithmetic and Logic unit (ALU)

Ekezie (1997) talked on the computerization of the banking sector.  He argued that the banking sector has taken a disseroute both in operation and system.  He made a mention on the universal banking system and globalization and talked that the two extremes work effectively and thrived because of the advent of computerization of all facts of life.  He further opened that:

“All the banking sector should adopt it in order to reap the harvest that might accrue from it such as speedy and accurate processing of data into information, inter-bank payment, interpersonal payment and all what not”.

Perry (1981) argued that the electronic data processing system (EDPS) help in the problem of queuing up for teller.  He said that the system in the banking sector is the “AUTOMATIC” TELLER MACHINE” System (ATMS).  He explained it with instance his transaction with the London Merchant Bank where he paid his creditors in the couple of seconds and had his merchandise dispatches to Nigeria.

Millichamp (2000:13) “foundation accounting”, discoursed treatise upon the tediously of bookkeeping.  In his bid he avers.

“In consequence to the tediously of book keeping processes, many business settings have opted to maintain the books my computer”.

He further averred that the computerization process or system couldn’t work in isolation, that the manual, mechanical, electro-mechanical and the electronic data processing system work in consonance and concurrently in order to thrive along side the modus operandi.  He concluded his talk on the electronic data processing system by saying that:

“The electronic data processing systems at hand and should be pursued only for its virtuosities”.

Gills (1974) argued on his discourse on computerization of banking and financial endeavours, that the electronic data processing system is the fastest means of carrying the interpersonal payment/ settlements.  Further, he averred that the manual mechanical and the electro-mechanical systems of the banking have been defended due to the advent of electronic data processing (EDP) system.  He gave the profile that:

“The computer fastness or speedy processing of debt is dependent on the number of computer silicon ships in the control and arithmetic and logic  unit (ie the central processing unit.)”

He related the case to Nigerian scenery  where there is lack of system in the banking sector and opined that the Nigerian investment should endeavour.

“Ochi-Okorie (1993:2-3) x-rayed that the electronic data processing (EDP) system is the most efficient labour-free, effective and the fastest means of data processing and endeavour manning.  He further evened that:

“The computerization all facts of human endeavours came forth with the following advantages – they are : interbank payment or debt settlements, fastness, payment to creditors, automatic other mileages of the electronic data processing (EDP) system which are not within reach”.

Electronic data processing (EDP) systems are used for keeping customers accounts, transactions such as withdrawals and deposit are entered into the computer through various terminals.  In addition, to the traditional banking operations, the computer is now used in such never areas as electronic fund Transfer (EFT) which enables banks to transfer money almost instantaneously from one location to another.

As an offshoot explanation of the above postulation Anuforom (1999) et al asserts that:

“Most banks now carry out their transaction with a special type of cheque called MICR cheque MICK  is pronounced “Maiken”.

These cheques have special characters, which represent the cheque number, account number, branch code et-c.  The characters are encoded with special ink containing iron oxide that becomes magnetized by passing the cheque through a magnetic field.  When the characters are then passed through the MICR reader, it decodes the magnetic field pattern formed by the magnetized characters and recognizes the number on the cheque.

When a cheque to be cashed the bank also encodes the amount on the cheque in addition to the cheque number, account number and branch code that have been pre-coded.  This easy to do method of banking operaions, Anuforom et al 1999 explicitly attributed to the use of electronic data processing system in community banks.

Madett 1992 avers that with electronic data processing system:

“Banks process huge amount of paper in form of cheques, loan records deposit, savings, investment information and so forth”.

In banking model avers hat a huge number of documents related to transaction must be processed daily using electronic data processing system.  Some of the document that must be processed by a bank include personal and bank cheques, deposits and withdrawal slips, credit card slips, and stock purchase and sales tickets.  The balance of all accounts affected by these documents must be keep up to date.

Electronic data processing system and their related technologies are used extensively by the banking industry to do all these works.  The majority of the bank to day also offer automated services
such as direct deposit or payroll cheques automated payment of bills, electronic fund transfer (EFT), home banking using a personal computer.  These services are all a direct result of computerization of banking operations.  One of the significant impacts that electronic data processing system has had in the banking industry is in the efficient processing of cheque, data entry has traditionally been the weakness link in the chain of data processing operations.  Although it can be processed electronically at extreme high speeds significantly more time is required to prepared data, enter it and then check its accuracy before it can actually be processed.

Arnold (1993) et al explicitly x-rayed the advantages of electronic data processing system of banking thus a bank with many branches using centralized processing and filling of data has been selected to illustrate the capacity and versatility of today’s electronic data processing systems.  To facilitate banking operations using an electronic data processing system  Arnold avers that:

During normal banking hours, one of the processing units is occupied handling letter terminals transaction on line basis.  The second processing units is used to process off line jobs”

There are also some disadvantages or problems associated with it, there are:

COMPUTER CRIMES:

Mandell avers that computer crime is the criminal act that poses a greater threat to a computer user that it would be a non-computer user, or a criminal that is accomplished through the use of computer:

Ndubuisi (1999) states that computer crime has only be taken seriously recently these include unauthorized access and theft of information, inflection with virus destruction of stored information and financial fraud to name but a few.  People that does this are those trusted they are exceptionally bright, motivated curious and adventuresome.

Generally these crimes in banking operation do not seem to incredible when one realizes the scope of unintentional mistakes that have been made with computerized cheques.

Contributing also in this line Ndubuisi attributed management attitudes towards electronic data processing system in banking coupled with management embarrassments as factors militating against the use of electronic data processing (EDP) system in grass root banking.  Contending to the above ascertain:

“Some older have resisted the new technology, ordinarily those who threatened by the changes accompanying it usually greet the introduction of new opposition”.

These people manifest their disapprovals of the new technology in different way from sabotaging the system to outright refusal to us it.

Nevertheless, evidences abound to prove that irrespective of the disadvantages of electronic data processing system, its advantages outweigh their problems and inconvenience.  In the light of the above assertion  the use of electronic data processing system in grass root banking is infact, a must and should be encouraged to enhanced productivity in Nigeria banking industry.

—-This article is not complete———–This article is not complete————

This article was extracted from a Project Research Work Topic

EVALUATING THE EFFECTS OF ELECTRONIC DATA PROCESSING IN COMMUNITY BANKS.  (A CASE STUDY OF EMENE COMMUNITY BANK ENUGU STATE)”

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The Effects of Electronic Data Processing in Community Banks

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