Abstract

Developments in information and communication technology are radically changing

the way banking is done. These developments in technology have resulted in new
delivery channels for banking products and services such as Automated Teller
Machines (ATMs), Telephone Banking, PC-Banking, and Electronic Funds Transfer at
Point of Sale (EFTPoS) bringing enormous competition in the country. This study
seeks to identify the information system being used at Intercontinental Bank Ghana
Ltd and its relevance to the business and customers.

The study also seeks to analyze the relationship between the banks information
systems, its business process and objectives. The results of the study generally
indicate that, technological innovation or electronic delivery channels have
contributed positively to the provision banking services and the growth and
performance of IBG in the banking industry.

INTRODUCTION

We are at a crossroads in Ghanaian Banking Business. Today and tomorrow

demands for excellence will require new designs for human systems to
promote competitive advantage and to deal with complexities of consumer

demands and environmental factors. Emerging Technologies and operational

systems will be one if not already one of the most significant factors in the

future success of organizations.

When considering the ingredients of one’s breakfast in the morning, it is

passed through a number of different processing steps between the farmer

and ones table and were handled by several different organizations.

Similarly, the newspaper is created and delivered through interactions of a

number of different organizations.

Most services are provided by people in organizations, just as fish is said to

be unaware of the water that surrounds it, most people give little thought to

the organizational processes that produce these services for their use.

This paper explores how the services people consume everyday is produced

and the challenges that go with it.

ORGANISATIONAL OVERVIEW

In answering the group case study on analyzing the relationships between an

organization’s information systems, its business processes and objectives,

Group 1 chose Intercontinental Bank Ghana Ltd which is in the services

industry offering banking services.

Intercontinental Bank Ghana Limited (IBG) received its universal banking

license from the Bank of Ghana in September 2006 and commenced

business soon after following the successful acquisition of the erstwhile Citi

savings and Loans Limited – one of the then leading savings and loans

companies in Ghana.

Established in Ghana as a subsidiary of Intercontinental Bank PLC Nigeria,

IBG is a financial institution driven by a passionate customer-centric

philosophy. The bank’s mantra / pay off: Happy Customer, Happy Bank is

anchored on the Bank’s belief in customer intimacy.

Intercontinental Bank which won the best growing bank in 2008 and was also

adjudged the bank with the highest return on equity and one who increased

its market share substantially in the 2009 Banking survey by Price water

house coopers.

In addressing the case study, the group tried to detail the

THE BANK’S MISSION AND VISION IBG’S mission is to help stakeholders

create and preserve wealth.

The banks vision is to be the number one financial services institution in

Ghana with a strong regional presence by 2016.

In line with this, IBG seeks to create a unique African institution

characterized by a determined focus on customers, employees and

shareholders and an absolute commitment to excellence in the financial

services industry. The bank seeks to pursue this mission and uphold its

values by applying the following principles to its business decisions and

conduct:

• Deliver quality service with courtesy, sensitivity and minimum delay

• Not only satisfy customers but work hard to delight them

• Provide customers with information on our services

• Meet customers at the appointed time and be helpful in all our dealings

• Ensure that the reception and meeting facilities are clean comfortable

and safe.

• Handle complains professionally and revert promptly.

As a Bank, we are committed to making our customers happy by delivering

excellent customer service. With this philosophy, our pledge is to constantly

upscale our processes to delight the customer with better; faster, efficient,

courteous and wealth-creating service delivery.

DESCRIPTION OF ORGANISATIONS BUSINESS

Intercontinental Bank Gh. Ltd (IBG) like any other Bank acts as payment

agent by conducting checking or current accounts for customers, paying

cheques drawn by customers on the bank, collecting cheques deposited to

customers' current accounts and making of advances to customers.

The function of IBG is not limited to the above stated traditional banking

functions, and includes:

• issue of banknotes (promissory notes issued by a banker and payable

to bearer on demand)

• processing of payments by way of telegraphic transfer, EFTPOS,

internet banking or other means

• issuing bank drafts and bank cheques

• accepting money on term deposit

• lending money by way of overdraft, installment loan or otherwise

• providing documentary and standby letters of credit (trade finance),

guarantees, performance bonds, securities underwriting commitments

and other forms of off-balance sheet exposures

• safekeeping of documents and other items in safe deposit boxes

• currency exchange

• acting as a 'financial supermarket' for the sale, distribution or

brokerage, with or without advice, of insurance, unit trusts and similar

financial products

Banking channels

Intercontinental Bank Gh. Ltd (IBG) offers many different channels customers

to access their banking and other services:

• A branch, banking centre or financial centre is a retail location where a

bank or financial institution offers a wide array of face-to-face service

to its customers.

• ATM is a computerized telecommunications device that provides a

financial institution's customers a method of financial transactions in a

public space without the need for a human clerk or bank teller. Most

banks now have more ATMs than branches, and ATMs are providing a

wider range of services to a wider range of users. For example in Hong

Kong, most ATMs enable anyone to deposit cash to any customer of

the bank's account by feeding in the notes and entering the account

number to be credited. Also, most ATMs enable card holders from

other banks to get their account balance and withdraw cash, even if

the card is issued by a foreign bank.

• Telephone banking is a service provided by a financial institution which

allows its customers to perform transactions over the telephone. This

normally includes bill payments for bills from major billers (e.g. for

electricity).

• Online banking is a term used for performing transactions, payments

etc. over the Internet through a bank, credit union or building society's

secure website.

• Mobile banking is a method of using one's mobile phone to conduct

simple banking transactions by remotely linking into a banking

network.
Lines of business

 Retail

• Current Accounts

• Savings Accounts

• Term Deposits

• Retail Loans

• Structured Deposits

• Cheques

• National & International payments, SEPA compliance

 Corporate

• Trade Finance – LC, LG, Bills, Collections

• Corporate Loans

• Treasury – FX, MM

 A set of different channels for offering bank’s services & products

in “real time” – Cards, VISA, MASTER, internet banking – retail &

corporate, SMS/e-mail notifications, Mobile phone banking,

Scoring, etc.

INFORMATION SYSTEM OF IBG

  Historical Note

The old bank system was Globus, this system was introduced upon

acquisition of the erstwhile Citi –Savings which was operating a manual non-

computerized system.

 Reasons IBG changed It’s core system

The bank desired to modernize their business model and processes to

provide efficient, less time and resource consuming, products and services.

• Migration from existing platform due to old legacy system being

unable to support the banks rapid expansion (doubled, in asset

size, in one year)

• Existing platform did not support integration with new channels –

internet banking, on-line card authorization, mobile phone

payments, etc.

• Need for a more robust platform and availability of resources for

its support and further development. The Globus was non-

scalable solution, unable to handle the increase in usage

• Lack of functionality desired, e.g. automatic provisioning, auto

loans liquidation, etc

 • Need for quicker time for market – fierce competition in a rapidly

expanding financial services market.

• No available resources for system upgrades (the only bank on

that system)

• The bank needed a standardized IT platform and infrastructure in

line with Allianz Germany IT policies, procedures and

requirements

• The bank’s desire to change the bank’s business and operational

model from centralized to de-centralize.

Problems IBG faced Previously

Numerous problems, such as:

• Inability to integrate with new electronic channels, scoring systems,

etc.

• Inability to introduce new competitive products to market, such as

flexible mortgage, consumer loans, and various deposits

• Inability to process in “Real time” card and internet banking

transactions

• Inability to produce in short time sophisticated reporting and

analysis both for internal and external usage

 • Delay in processing transactions to reduce turnaround time to

satisfy customers.

Information System currently available

IBG started in early 2007 looking for:

• Easy integration/interfaces

• Depth and breadth of functionality

• Quick time to market

• Internationally recognized vendor/solution with local presence in

Ghana

The bank started using the i-flex software in that same year for their

operations.

IBG INFORMATION PROCESSING AND TECHNOLOGY/TRANSACTION

PROCESSING SYSTEMS

 Characteristics of Transaction Processing Systems

Transaction processing systems (TPS) of i-flex being used by the bank

collect, store, modify and retrieve the transactions of the bank. The main
information processes are collecting and storing. The four important

characteristics of a TPS are:

• RAPID RESPONSE- Fast performance with a rapid response is critical.

Input must become output in seconds so customers don’t wait.

• RELIABILITY- Organisations rely heavily on their TPS with failure

possibly stopping business. Back-up and recovery procedures must be

quick and accurate.

• INFLEXIBILITY- A TPS wants every transaction processed in the same

way regardless of user or time. If it were flexible there would be too

many opportunities for non-standard operations.

• CONTROLLED PROCESSING- The processing must support an

organisation's operations.

Properties of a TPS and Existing Relationship Between The Business

Process and Objectives of The Bank.

The components of a TPS include hardware, software and people. The most

important component of a TPS is people. Without people the system does not

have customers and without customers it does not have a function to

perform. People in a TPS of the bank can be divided into 3 categories:

decision makers especially those in management position, frontline staff

or direct users of software and customers of the bank.

Decision makers especially those in management position: The users

are people employees of the company who own the TPS. They will use it to

provide information about the system but will not enter data themselves.

The information they provide from the TPS may be used to provide inputs for

other information systems such as stock control, marketing etc...

Frontline staff or direct users of software: frontline staff or any other

Staff are direct users of the system. These are the people who will enter the

data. They include data entry operators, customer service operators, people

working at checkouts and anyone carrying out the tasks required to process

the data.

Customers of the bank: These are people who do not directly work for the

company but people off the street who sometimes require the services of a

TPS as they enter transactions and validate data such as customer

withdrawing money from an ATM.

TYPES OF TRANSACTION PROCESSING SYSTEMS

 Batch Transaction Processing

BTP collects the transaction data as a group and processes it later after time

delay as batches of identical data. Processed when convenient or economical

to do so. Large volumes have lower processing costs. Collected and stored
offline using magnetic tape or paper. Batch approach is used for generating

pay cheques etc. Carried out in large organizations using mainframe or

midrange computers. Three disadvantages are the transactions must wait for

processing as schedule is predetermined, errors cannot be corrected during

processing and sorting transaction data is expensive and time consuming.

Examples of BTP systems include:

• CHEQUE CLEARANCE- A cheque is a written order asking the bank to

pay an amount of money to a particular person. When one is issued to

a person they deposit it into a bank account yet the money cannot be

withdrawn until the cheque is cleared. This involves checking the that

the cheque writer has enough money in their account to cover it

usually taking 3 working days in which cheques are cleared in a group

during a quiet period of the day.

• CREDIT CARD TRANSACTIONS- Credit cards have become a method of

paying for goods and services. In a credit slip system the retailer sends

credit slips to the bank as a group. In POS terminal sales the

transactions are stored for processing later. The customers may view

their credit card transactions a real-time but the actual updating is

batch.

 Real-Time Transaction Processing

RTTP is the immediate processing of data. Provides instant confirmation yet

requires access to online database. Involves using terminal or workstation to

enter data and display results and a large number of users to simultaneously

perform transactions. Uses computer network to link terminals to mainframe

computer and database. Every real-time TPS has a response time delay. For

a TPS to be classified real-time the response time delay must be acceptable

for that application. Two main concerns:

Examples of RTTP systems include:

• POS TERMINALS- such as E-zwich make use of this system.

BENEFITS OF FLEXCUBE INTRODUCTION TO THE BANK

• Domestic and International Payments enabled staff reductions(cost

reduction to IBG) , faster and more reliable services to customers

• An on-line and timely reporting enabled all levels of management for

easy analysis and fast response to market trends and customer’s

needs

• A range of new products have been introduced and new customer

growth rate increased, from 15% to 35%, last year.

• A range of new services introduced such as on-line card authorization,

internet banking, and reporting

• Customer scoring system interfaced to FlexCube reduced the average

time for decision making from 2.5 days to 6 Hours

 • The bank’s front office personnel was relieved from back office duties

and entirely focused on sales and customer services

• Customer’s information gathered, stored and analyzed has increased

by over 70% for retail customers and over 50% for corporate ones

RECOMMENDATION

As part of the case study, the group is supposed to recommend an

appropriate information system for the bank; we however found the current

information system being used by the bank as suitable to the business

climate in which the bank is currently operating in.

CONCLUSION

Anyone who has been using the services of a Ghanaian bank for more than

15 years will concede that information systems has had a huge impact on

banking services. From a period of customer savings passbooks manually

updated by our tellers and strict adherence to branch opening hours, we now

have a situation of statements printed on demand as many times as

required, a myriad of services available 24 hours a day through our ATMs,

telephone and internet banking. Technology has certainly introduced greater

efficiency and the direct benefits to customers using branch services include

extended opening hours both on weekdays and at weekends. Many banks

like IBG who have embraced the new era of information system are now fully
networked allowing their customers to bank with the bank as against

banking with the branch. This has resulted in:

* quick turnaround and improved customer service

* easy facilitation of customers' business transactions

* better financial management for customers

* facilitation of quicker settlement of inter-bank transactions

REFERENCE