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ICT APPLICATION: Banking Applications

ICT APPLICATION: Banking Applications (Electronic Fund Transfer)

Electronic Fund Transfer (EFT)

EFT is a system that allows money transfer instructions to be sent directly to a bank’s computer system. Upon receiving one of these instructions, the computer system automatically transfers the specified amount from one account to another.

Transfer instructions can come from other banks or from businesses.

A very common use of EFT is when a large business pays its employees’ salaries. On pay day, the businesses tells the bank to move money from the business account to the employees’ bank accounts.

Other examples of where EFT is used are:

  • Using Cash Machines (ATMs)

ATMs can be used to for a range of banking services…

  • Withdrawing cash
  • Depositing money
  • Checking the balance of accounts
  • Transferring money between accounts
  • Paying bills
  • Electronic Payments for Goods (EFTPOS)

Banks allow goods to be paid for electronically, using a system called Electronic Fund Transfer at Point-of-Sale (EFTPOS).

ICT APPLICATION: Banking Applications

Internet Banking

It is now very common for bank customers to access their bank account from home using on-line banking services.

Customers use a computer and connect to the bank’s secure (encrypted) website where they login (usually with a username and a password)

Customers can use the on-line banking system to…

  • Check the balance of bank accounts
  • Pay bills
  • Transfer money between accounts (using EFT)
  • Apply for loans, or other services

Banking Applications (EFT)

Telephone Banking

This is similar to Internet banking, but does not require a computer, only a normal telephone.

The system works by you calling the bank’s telephone banking number then…

  • You enter your account number (using the phone’s number keys)
  • You enter your PIN / secret code
  • You then hear various options: (“Press 1 to find your balance, Press 2 to transfer money…”)
  • You pick an option (using the phone’s number keys)
  • And so on…

Customers can use the telephone banking system to…

  • Check the balance of bank accounts
  • Pay bills
  • Transfer money between accounts (using EFT)
  • Speak to a bank representative to get financial advice

Processing Cheques (Cheque ‘Clearing’)

Banks have to deal with thousands of hand-written, paper cheques every day.

When a cheque arrives at a bank, the information on the cheque has to be entered into the bank’s computer system so that the correct funds can be transferred between the correct accounts. Entering this data quickly and accurately is a time-consuming and difficult task.

To help speed things up, a special system of printing is used on cheques that can be read by a reader connected to the computer system. At the bottom of every cheque, printed in a special font using magnetic ink, is the bank account number and cheque number:

Each cheque is passed through an MICR reader that can read these special numbers. (A small reader is shown here, but in large banks the MICR readers are much bigger and can thousands hundreds of cheques.

The hand-written part of the cheque (the payee and the value of payment) can be entered into the computer system by either using a human to read the writing and typing the data in, or by using OCR.

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