The National Teachers College Quiapo , Manila

Case Study
(Banking And Finance)

Submitted to: Mr. Bryan Chua Submitted by: Santos, Marylene Facun, Froudy Jr. Villaraza, Angelica Nacino, Angelique Gloria, Emmanuel Nikko Villanueva, Katrina Capuli, Raffy Calilap, Paolo

Guide Questions:
1. How do a ATMs provide accessibility and Productivity to the Branch? Accessibility Services staff members have received questions from stakeholders seeking guidance on the accessibility requirements for Automatic Teller Machines (ATMs) that are found in the 2010 ADA Design Standards recently released by the US Department of Justice. We have assembled the three (3) most commonly asked questions about ATM accessibility below along with our responses. Accessibility Services Response/Recommendation: If an entity supplies/manufactures ATMs, those machines that are currently in use should comply with either the 1991 ADAAG requirements for ATMs ( Sections 4.1.3 (20) and 4.34) or with the 2010 ADA Standards requirements. Note that the 2010 ADA Standards for ATMs are the same as the Revised ADA/ABA Accessibility Guidelines issued for ATMs by the US Access Board in July, 2004. The sections in the 2010 ADA Standards that scope ATMs and provide technical criteria for ATMs are Sections 220 and 707. Again, from now until March 15, 2012, owners/manufacturers have the option of providing ATMs that comply with either of these two standards.The 2010 ADA Standards provide clear guidance on achieving accessibility at ATMs. The 1991 Standards were not as illustrative. For instance, 1991 ADAAG States:

2. How does high Traffic count correlate to high volume transactions?

High Volume Transaction Processing (HVTP) Challenges of HVTP The High Volume Transaction Processing environment contains unique characteristics and requirements which present significant challenges to implementing a successful solution. The following extract from a management brief titled "Strategies for e-Volume, Competitive Impact of Transaction Processing in e-Business", prepared by International Technology Group, provides insight into some of the HVTP characteristics and challenges: Functionality does not equate to scalability. The functional characteristics of any solution do not, in themselves, say anything about the ability to handle volume. A system designed for small workloads does not automatically scale. Effective volume testing should always precede selection of any application, database, or server. The difficulties experienced by many companies that have implemented enterprise resource planning (ERP) systems are due in no small part to these effects. Inability to handle volume growth has also been the predominant cause of major Web outages, and has contributed to the less visible but often more damaging slowdowns in performance that have characterized many Web commerce systems at peak times. All system components must be optimized for volume. The ability to handle volume is determined not only by application design, but also by underlying databases, transaction monitors, systems software, middleware and hardware platforms. A bottleneck in any one of these will impact the performance of the entire system. It may be possible to scale a poorly optimized system beyond its architectural limits. But there will be penalties in performance, difficulty of implementation and support, and costs. Over

time, companies can easily become trapped in a cycle of increasing expenditures for diminishing returns, as escalating investments become necessary to handle even incremental workload growth. Service quality is directly related to volume. It is comparatively easy to deliver high levels of availability, response time, transaction integrity and security in a low-volume environment. But difficulties increase as workloads expand. Maintaining, say, 99.999 percent availability with mainframe-class transaction volumes is a great deal more difficult than at the department level or in a smaller organization. Minimization of planned outages also becomes more challenging. Capabilities such as clustering, concurrent workload execution and data movement must all be more effective in a high-volume environment. Failure to allow for this effect is responsible for the inability even of more sophisticated ERP and Web commerce operators to achieve 7x24 operations. Volume affects the entire IT infrastructure. As a general principle, each business transaction at the customer interface generates at least 20 to 50 other business transactions as its effects ripple through systems for order fulfillment, product and service delivery, logistics, inventory, purchasing, accounting and other applications. High-volume transaction processing thus requires that all systems be capable of handling large workloads in an efficient manner. A bottleneck at any point will, again, result in slowdowns and disruptions that will affect processes throughout the company and extend to the supply chain as a whole. The continued predominance of mainframe systems in high-volume transaction processing has not only been due to the costs and difficulties of replacing legacy systems. It has also occurred because mainframe architecture and -- in some cases, mainframe databases and applications -are better optimized for such workloads." TPF meeting the challenges TPF has been meeting the challenges of the high-volume transaction processing environment since its inception. TPF has been architected specifically to meet the challenges of these high end transaction environments: extremely reliable - 24x7, highly available - 99.99%, high volume - over ten thousand messages per second, and scalable - TPF continues to scale to meet the most demanding requirements. Because TPF systems are so efficient, many customers run their TPF CPU at 90%, and peak loads are not an issue. Also, there are production TPF systems that have been up and running for years without any planned or unplanned outages. Enhancements that have been made, and are being made to TPF, are always designed to maintain these inherent strengths of the TPF system. Evolution of TPF The fundamental TPF architecture was defined as early as the late fifties and the early iterations in the mid-sixties. The basic concept was to develop a transaction orientated operating system where expensive "job" preparation and execution overhead was minimized. Operating system level pre-built structures were ready to dynamically accept inbound traffic, process it, respond and once again return to a static state with little or no ongoing consumption of resources. As memory was precious in those days, there was a heavy dependency on efficient I/O processing to DASD. This proved to be a premier feature in TPF because as the numbers of users were increased and more volumes added for data and I/O capacity, there was no net increase in overhead. In other words, there were no complicated structures that reached a point

of diminishing returns. The application programs themselves were also written very close to the low level TPF architecture. Application programmers were in tight control of database design. Many lower level system services common in other operating systems were implemented at the applications layer. The result of this was an overall solution for handling reservation traffic that was repeatedly proven to be as much as ten times (or more) as efficient as anything remotely comparable to TPF, even running on the same exact hardware. A system that today is already handling the "billion transactions per day" that many claim to aspire to.

3. What are the criteria for a productive and effective ATM site
Permissible Activities
Under these guidelines, the following products/services may be offered: Opening and maintaining a BB Account. A BB account is an account opened and operated by a customer with a bank. Banks may associate such account a particular branch or to a centralized branchless banking unit. Account capabilities/limits are commensurate with the level of customer due diligence (CDD) and KYC procedures the customer has undergone. Risk basked KYC and CDD structure is explained in the relevant section of these guidelines. Account-to-account Fund transfer: Customers may transfer funds to/from their BB account from/to their other pre-registered accounts (current/saving bank accounts, loan limit accounts, credit card accounts etc.) Person-to-person Fund Transfers; Customer can transfer funds from their account to BB or regular accounts of other customers of same or some other bank (depending on the model capabilities). Cash-in and Cash-out: Customers may deposit and withdraw funds to/from their BB account using a variety of options including bank-branch counters, ATM machines and authorized agent locations. Bill Payments: A BB account can also be used to pay utility bills (e.g. Gas, Electricity, Phone etc.) Merchant Payments: Customers can use a BB account to make payments for purchases of goods and/or services. Loan Disbursement/Repayment: FIs, particularly Microfinance institutions may use BB accounts as a means to disburse small loan amounts to their borrowers having BB accounts. The same accounts may be used by customers to repay their loan installments. Anti Money-Laundering All FIs and their agents must comply with the Anti-Money Laundering Act (2008) as well as the international standards set by the FATF. These require: Adequate customer due diligence (KYC) be undertaken on all new accounts and on one-off cash transactions over designated thresholds. This requires identifying the customer and verifying the customers identity. Financial service providers to keep detailed transaction records for at least five years. Financial institutions to report suspicious transactions promptly to the

AML/CFT authority. Special attention to threats that may arise from new technologies that may favor anonymity. Policies and procedures be in place to address specific risks associated with non-face to face business relationships and transactions. Customers using BB applications should be uniquely identified. This means that FIs should be able to trace BB transactions to particular customers. In this regard mobile phone SIM cards will have to be registered by the FI. Agents-assisted Banking The true power of branchless banking cannot be unleashed until some trusted third parties are involved in performing some of the activities that are traditionally performed in bank branches by bank staff. Use of the word agent in this context does not include third party service providers who provide certain technical services to banks, such as provision of transaction processing system. For the purpose of these guidelines we distinguish between agents and service providers. Though the term agent in this context does not include third party technology service providers, there is no restriction on a third party technology service provider to become a basic banking agent provided it meets the criteria for becoming an agent.

4. What critical factors should management consider in growing its electronic banking business, via ATM
TYPES OF ELECTRONIC PAYMENT SYSTEMS

With the growing complexities in the e-commerce transactions, different electronic payment systems have appeared in the last few years. At least dozens of electronic payment systems proposed or already in practice are found (Murthy, 2002). The grouping can be made on the basis of what information is being transferred online. Murthy (2002) explained six types of electronic payment systems: (1) PC-Banking (2) Credit Cards (3) Electronic Cheques (i-cheques) (4) Micro payment (5) Smart Cards and (6) E-Cash. Kalakota and Whinston (1996) identified three types of electronic payment systems: (1) Digital Token based electronic payment systems 12 , (2) Smart Card based electronic payment system13 and (3) Credit based electronic payment systems 14 . Dennis (2001) classified electronic payment system into two categories: (1) Electronic Cash and (2) Electronic Debit-Credit Card Systems. Thus, electronic payment system can be broadly divided into four general types (Anderson, 1998): Online Credit Card Payment System Electronic Cheque System Electronic Cash System and Smart Card based Electronic Payment System Online Credit Card Payment System: It seeks to extend the functionality of existing credit cards 15 for use as online shopping payment tools. This payment system has been widely accepted by consumers and merchants throughout the world, and by far the most popular methods of payments especially in the retail markets (Laudon and Traver,

2002). This form of payment system has several advantages, which were never available through the traditional modes of payment. Some of the most important are: privacy, integrity, compatibility, good transaction efficiency, acceptability, convenience, mobility Retail banking: Management Reports: Senior management needs to know where the bank stands, financially, at any point in time so they can make effective decisions. Auditors need to be able to look at history, and drill down if necessary. To accommodate these requirements Portfolio Plus offers a number of reports including:

Trial Balance Dormant Accounts Overdraft Report Fee Summary Reports Stop/Hold Reports Open/Closed Accounts Line of Credit Delinquency Line of Credit Review Account Transactions by Transaction Code Teller Transactions by Entry Date Teller Transactions by Type More

Technology and Banks Transformation Computers are getting more sophisticated. They have given banks a potential they could only dream about and have given bank customers high expectations. The changes that new technologies have brought to banking are enormous in their impact on officers, employees, and customers of banks. Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before - thus creating new bases of competition. Rapid access to critical information and the ability to act quickly and effectively will distinguish the successful banks of the future. The bank gains a vital competitive advantage by having a direct marketing and accountable customer service environment and new, streamlined business processes. Consistent management and decision support systems provide the bank that competitive edge to forge ahead in the banking marketplace. Major applications. The advantages accruing from computerization are three-directional - to the customer, to the bank and to the employee. For the customer. Banks are aware of customer's need for new services and plan to make them available. IT has increased the level of competition and forced them to integrate the new technologies in order to satisfy their customers. They have already developed and implemented a certain number of solutions among them:

Self-inquiry facility: Facility for logging into specified self-inquiry terminals at the branch to inquire and view the transactions in the account. Remote banking: Remote terminals at the customer site connected to the respective branch through a modem, enabling the customer to make inquiries regarding his accounts, on-line, without having to move from his office. Anytime banking- Anywhere banking: Installation of ATMs which offer non-stop cash withdrawal, remittances and inquiry facilities. Networking of computerized branches intercity and intra-city, will permit customers of these branches, when interconnected, to transact from any of these branches.

Telebanking: A 24-hour service through which inquiries regarding balances and transactions in the account can be made over the phone. Electronic Banking: This enables the bank to provide corporate or high value customers with a Graphical User Interface (GUI) software on a PC, to inquire about their financial transactions and accounts, cash transfers, cheque book issue and inquiry on rates without visiting the bank. Moreover, LC text and details on bills can be sent by the customer, and the bank can download the same. The technology used to provide this service is called electronic data interchange (EDI). It is used to transmit business transactions in computer-readble form between organizations and individuals in a standard format. As information is centralized and updates are available simultaneously at all places, singlewindow service becomes possible, leading to effective reduction in waiting time. For the bank. During the last decade, banks applied IT to a wide range of back and front office tasks in addition to a great number of new products. The major advantages for the bank to implement IT are:

Availability of a wide range of inquiry facilities, assisting the bank in business development and follow-up. Immediate replies to customer queries without reference to ledger-keeper as terminals are provided to Managers and Chief Managers. Automatic and prompt carrying out of standing instructions on due date and generation of reports. Generation of various MIS reports and periodical returns on due dates. Fast and up-to-date information transfer enabling speedier decisions, by interconnecting computerized branches and controlling offices. For the employees. IT has increased their productivity through the followings:

Accurate computing of cumbersome and time-consuming jobs such as balancing and interest calculations on due dates. Automatic printing of covering schedules, deposit receipts, pass book / pass sheet, freeing the staff from performing these time-consuming jobs, and enabling them to give more attention to the needs of the customer. Signature retrieval facility, assisting in verification of transactions, sitting at their own terminal. Avoidance of duplication of entries due to existence of single-point data entry.