Information System In Allied Bank

Allied bank was the first bank to be established in Pakistan. It started out in Lahore by the name Australasia Bank before independence in 1942; was renamed Allied Bank of Pakistan Limited in 1974 and then Allied Bank Limited in 2005.

Allied Bank was the first Muslim bank to have been established in Pakistan.

Established in December 1942 as the Australasia Bank in Lahore with a paid-up share capital of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank attracted deposits equivalent to Rs. 0.431 million in its first eighteen months of business.

Today, with its existence of over 60 years, the Bank has built itself a foundation with a strong equity, assets and deposit base. At the time, the Bank’s total assets amounted to Rs. 0.572 million. Today, Allied Bank’s paid up Capital & Reserves amount to Rs. 10.5 billion, deposits exceed Rs. 143 billion and total assets equal Rs. 170 billion. It offers universal banking services, while placing major emphasis on retail banking. The Bank also has the largest network of over 800 online branches in Pakistan and offers various technology-based products and services to its diverse clientele.

Vision:

To become a dynamic and efficient bank providing integrated solutions and the first choice of bank for all customers.

Mission:

To provide high tech innovative solutions to meet customer requirements

To create sustainable value through growth, efficiency and diversity for all stake holders

To provide a challenging work environment, and reward dedicated team members

To play a proactive role in contributing towards the society

Values:

Integrity

Excellence in service

High performance

Innovation and growth

Areas of Business:

Allied bank is operating in all major cities of Pakistan. It has a network of 700 branches.

Information Systems at Allied Bank Limited

Information systems used at ABL differ from department to department and complete specifications of systems used in Customer Retail Banking Department will be mentioned in the later part of the report however, the IS used in Allied bank serves the common purpose of faster communication between all stake holders, updating of transactions process on daily basis, provision of better customer service, faster execution of data, easier access and communication to the central branch and other branches countrywide etc. However, Allied Bank used manual systems before 2002. The reasons for making the shift to automated information systems are summarized below:

The need for converting from manual to automated systems:

Personnel at Allied Bank are of the view that both manual and automated systems are effective ways of message entry and transmission but manual data systems have certain cons as compared to their counterpart the automated data systems. Manual data systems are slow and tedious as compared to automated systems. Moreover, there are more chances of human error occurring in the usage of manual systems as compared to automated systems and this error removing is crucial to the efficient functioning of the Allied Bank. Moreover, manual data systems are less secure and tampering with data is possible via their use and to minimize that risk Allied bank shifted to the use of automated Data systems in 2002. Moreover, Mr. Shahzad Shahid, Product Manager-Liabilities, was of the view that this change will result in cost reduction in the long run.

Management Information System used at ABL

The MIS used at Allied bank Limited is Oracle Database 10g. Oracle Data base 10g has completely transformed the outlook and operations of ABL. It has transformed the structure such that now ABL’s IS does not consist of fragmented machineries working individually to attain goals but they now function as a fused collection of servers, storage devices, and systems to meet the changing processing needs of ABL. This resulted in dramatic cost reduction, overall efficiency and enhancement in the quality of customer service. It has also reduced hardware costs by efficient networking and amalgamating of functions performed by various servers and systems. Cost reduction also took place because Oracle 10g eliminated the need for the purchases and upgrading of management softwares and tools and third party interventions as it was a complete management solution in itself.

Oracle 10g also enabled Allied Bank Limited in efficient and wider data base storage, high and faster accessibility of data, faster performance, secure data transferring and cheaper application development. Salient features of Oracle 10g from which ABL is benefiting from are described below in great detail: [1] 

Oracle 10g served as a very attractive investment for Allied Bank Limited as it cut down significant costs of Allied Bank on hardware because Oracle 10g provide the technology of Oracle Real Application Clusters which enabled the creation of communication clusters via use of just 3-4 PCs which become more easier to administer and run and are more efficient as compared to functioning of sole systems.

Oracle 10g also enabled Allied Bank to cut down its costs on storage devices which prove to be a big cost for banks to store humongous amounts of daily transactions and data. However, this problem was solved by the use of Oracle’s automatic storage management which not only enabled the pooling of PCs but also enabled pooling of storage devices to the communication cluster as per required. This choice of addition of storage devices to clusters made the data transformation, collection and storage cheaper, easier and efficient.

Oracle 10g has enabled Allied bank to save on its database management costs as its database administration is either completely automatic or much uncomplicated. This has enabled Allied bank to save its costs on the training of new database managers.

Oracle 10g has its own cluster administration softwares which monitor, manage the performance of clusters and thus eliminates the needs for extra utility and program softwares. Oracle uses Oracle Enterprise Manager Grid Control and Management Packs to monitor clusters performance efficiently.

Oracle 10g uses GUI tools and utilities for increasing the power and efficiency of the clusters.

Oracle 10g also introduces self-administration in the databases through use of programs such as Automatic Storage Management, Automatic Memory Management, Automatic Optimizer Statistics Collection, Automatic Workload Repository, Automatic Database Diagnostics Monitor, Automatic SQL Tuning, Segment Advisor, Automatic Workload Management, Automatic Disk-Based Backup and Recovery to meet the changing processing, data transforming and storing demands.

Thus, Allied Bank has benefited greatly from its shift from Manual systems to the automated Oracle 10g system. The benefits reaped are unparalleled in terms of cost reduction, efficiency, data disseminating and decision making. Allied Bank in addition to the use of Oracle 10g uses softwares such as Unibank, however it is planning to change its banking software from Unibank to Temenos t-24 in the mid of 2010.

Shift from Unibank to Temenos T-24

When Allied bank shifted to automated Information Systems in 2002, it started using softwares such as UNIBANK .This software held answers to the management of all the chaos created by the use of manual systems. [2] Unibank was a branch centric cash management software which held answers to the banking problems of the time thus it was called the core banking solution. Unibank gave faster and safe electronic access to banking transactions and functions. Unibank enabled Allied Bank to:

Evaluate the latest record of all account transactions taking place in the branch

Exchange information with other departments of the branch such as finance and accounting

Monitoring and management of deposits and withdrawals simultaneously

Electronic transfer of data from one branch to another

Provision of e-statements for the employees making their jobs easier.

Secure data control and transfer.

Electronic monitoring and management of employee payrolls

Need for Temenos T-24

Although Unibank seemed to be the answer to all the banking problems at that time however due to changing technological trends, higher uncertainty in the environment, shift towards centralized functioning and policies, Allied Bank has decided to shift from Unibank to Temenos T-24. The reason being that, Unibank was branch centric software and due to this reason data could be lost or misplaced if server crashed at any particular branch. Moreover, considering the uncertain political situation in Pakistan, there was high possibility of raids and fires and due to this the threat of data loss was eminent thus a shift is being planned and implemented from Unibank to Temenos T-24 as we speak. This shift will be implemented in all the branches countrywide within a period of 6 months.

The reason for shifting to Temenos T-24 is that it is centralized software with the central server in Kashmir Road Branch in Lahore. This central server acts as a hub and daily transmissions are not only recorded in branches but in the central hub too, thus making the information more secure. Moreover, designated user ids/passwords, bio-metric systems add to the security of information. All the transactions and operation take place in real time. Policies are designed at the central server in Lahore and are applicable to all the branches country wide thus making the operations uniform and consistent in all the branches. [3] 

Temenos T-24 in addition to providing all the functions that Unibank provided, offers a more secure platform and new and efficient data bases. Moreover, Temenos T-24 is partners with Microsoft and has adopted MS platform to make the functioning of the software more user-friendly and easy. Moreover, one of the reasons for adopting Temenos T24 by ABL is that its cost of owner ship is very cheap as compared to the benefits it provides. Moreover, it uses established programs such as HTTP, XML so that functioning it not an entirely new experience but adds on to the previous knowledge of the employees.

Moreover, it has an edge over Unibank as it eliminates the need for end-of-day banking and is a true 24/7 banking system, which heaves away burden from the employees and enables employees and customers to access updated information at all times.

Department: Commercial and Retail Banking

Overview

The Commercial & Retail Banking Group (CRBG) offers a variety of asset and liability-based retail products to its customers. The Group’s main focus has been on introducing various financing and investment products for its valuable clients, and contributing to the steady growth of the financial industry.

CRBG consists of 4 geographic groups and is further divided across 27 regions in Pakistan. Each region is responsible for providing a quality service to its own customer-base.

In recent years, the Group has been working to find alternate ways to bank for customers, and has installed more ATMs to its already strong and largest ATM network.

The department offers the following product and services to its customers

Internet Banking

Online Banking

Profit Rates

ATM Network

Unclaimed Deposits

Deposit Account

SME

Agriculture

Other Services

Corporate Leasing

The department has a total of 6000 employees all over Pakistan, the information flow and the data transfer rate thus is very high and poses a great challenge for the Information System of the department to maintain and keep it secure.

Functional Hierarchy of the Department

Technical specifications

Allied Bank after its privatization has been following a pro I.T policy. The switch from the manual system to a more automated Information System requires certain infrastructure (PC’s, Softwares etc) and ABL in this regard didn’t compromise on quality; they have a contract with Digital World Pakistan Pvt. Ltd. (DWP) to provide state of the art computers with the best softwares to run the M.I.S system.

The CRBG dept of ABL has the following I.T infrastructure:

Hardware Specifications

Personal computers-

14 in total – Consisting of 9 desktop PC’s and 5 laptops

Desktop PC’s Specs: Intel Pentium 4 2.5ghz, 512MB RAM, 80 GB hard-disk

Laptop PC’s Specifications: Intel Dual Core2 2Ghz, 2gb RAM, 160GB Hard-disk

HP Printers

3 in total – 2 HP LaserJet 1010 Colored Printers,

1 HP Desk-jet Black and white printer

HP Digital Scanner

IBM P5 Mainframe Server

Specifications:

Four 1.65GHz 64-bit POWER5 processors

L2 cache: 1.9MB (2-way); 3.8MB (4-way)

L3 cache: 36MB (2-way); 72MB (4-way)

32GB of 266MHz DDR1 memory

Two 10/100/1000 Ethernet ports

Optional 2 Gigabit Fibre Channel, 10 Gigabit Ethernet and 4x InfiniBand® adapters

Two USB, two HMC and two system ports

Software Specifications

Application Software

CRBG department Employees uses the following application softwares;

Microsoft Office 2007 & 2010

McAfee Anti-Virus 2010

Adobe Reader 8

System Software

The department’s computers were found to be using the following system softwares;

Operating System: Windows XP for Desk-top PC’s and Windows Vista for the Laptops.

Windows NT server for mainframe server.

Core Banking Solution

The software currently in use is UNIBANK, however T24 has been introduced in one branch in LAHORE.

Query Software

ABL employees generate queries through these softwares, for example if I want to view a customer’s demographics I will put in a query in the Discoverer Viewer which will then seek the data from the Central Database

Discoverer Viewer – It is just for viewing of data,

Discoverer PLUS – The queries here can even be edited and employees have limited access to this software

Network Type

Allied bank is using the client/server network because the employees easily share the data and its cheaper than others and maintainable. All the data is saved in Central Database (CBS) and employees can easily access it. This type of computing system provides an easy access and efficient flow of data, which increase the functionality of organization.

End-User and training

In this era of cut-throat competition and diminishing profit margins Banks are becoming more lean, service oriented and efficient. As mentioned before Banks in order to keep this trend of efficiency going upward are adopting new information systems and updating the existing ones however one barrier to this are the employees, there is already a shortage of computer literate people in Pakistan and for this reason when new software’s or In our case a new CORE BANKNG SOLUTION is introduced it requires rigorous training session to train the employees so that they are able to use the software.

The effectiveness of core banking systems is directly related to the skills and knowledge of those operating them; therefore training is an essential investment and not an expense. The training session have been divided into three stages

When we talk of the end user it’s the employees themselves here, they use the information available and make different queries accordingly as mentioned before currently the Core Banking Solution (CBS) namely Unibank is being change to Temenos and this requires that the support and operations staff be trained to use this CBS. For this reason different training sessions have been organized by the Bank and the Temenos technical team itself.

Apart from this Temenos, to support the contracted BANKS, also provides the following courses to their employees:

Open Training Courses

Bespoke Training courses

End User Training (EUT)

Training consultancy for design and development of EUT courses

eLearning and Computer Based Training (CBT)

The “Train the Trainer” approach

The benefits of attending these training programs include dedicated premises and training equipment, and the added advantage of minimizing interruptions for the duration of training course.

Information Intakes and Flow

CRBG has information flow daily from all over Pakistan, the department has the responsibility to effectively manage the liabilities of the Bank.

The information accessible by this department through the Information system includes:

Daily Monitoring of Deposits

The deposits intakes and off takes during the day

Maintaining a minimum balance of funds

ATM monitoring

Monitoring the downtime of each ATM

Monitoring which area has a consistent network/server issues

Customer Demographics

ABL’s information system is linked to NADRA’s system for verification of Customers ID’s

CRBG has access to all the information of its customers and employees as it is responsible for managing the liabilities section

Account Opening Run Rate

The accounts opened each day along with their balances

Employee Check in & Check out time

Through monitoring of this data employee efficiency can also be measured.

Query Regarding an Employee

Employee Record

Information Flow

We observe TRANSACTION PROCESSING SYSTEM functional in this department apart from the Office Automation Systems, all the activities and transactions done throughout the chain of command in this department is recorded first at the Branch level then after EODs (End of Day) are Run all the data of that days transactions are transferred to the ORACLE CENTRAL DATABASE located in ABL HEAD-QUARTERS LAHORE.

Real-time Monitoring is being done of this information flow by the department, once the day’s information is saved in the ORACLE CENTRAL DATABASE in their respected fields and tables, it can be accessed through the DISCOVERER VIEWER/PLUS Software the next day by creating a query for it.

Issues with the Information System

To function effectively as an interacting, interrelated, and interdependent feeDatabase Administratorck tool for management and staff, MIS must be “useable.” The five elements of a useable MIS system are: timeliness, accuracy, consistency, completeness, and relevance. The usefulness of MIS is hindered whenever one or more of these elements are compromised.

The IS at Allied Bank, although effective to a great extent, has certain weaknesses as we found out:

From a branch centered approach, the bank has moved to a centralized system. Transactions at the branches, previously used to be stored and processed at the branches only. It was only at the day end, that all data and information was relayed to the head office. Now, however, this practice has changed. Branches only facilitate interactions with customers, whereas the information is directly send to the head office and is processed there in real time. The problem with this is the time lag that results subsequently. Data flow from the point of transaction to the head office, back to the point of transaction is a longer and hence a slower process.

Also the security procedures inbuilt in the new software, Temenos, make processing slower. In the new IS, cash transactions taking place go from a Temenos account head to a buffer account and then to the customer’s account. Previously, the cash transactions were directly debited/ credited to the customer account. Buffer accounts created, although increase the overall security; make the processing of data slower.

Too much reliance on information systems also means that in the scenario when server crashes down, or gets hanged, banking transactions will be completely disrupted.

Security Measures and Backup

One of the major concerns of organizations using information technology to carry out their business processes is how to secure the data against internal and external threats. With modern advancements, mitigating information security threats has become an ongoing battle. Viruses, worms, hacker attacks, spam, phishing, and instant messaging attacks are just some of the problems. Data bank faces risk of security breaches not only at the hands of customers and outsiders, but also from the employees working within the organization. Therefore it is highly crucial to build security parameters to detect whatsoever threats there might be and also to ensure data safety.

At Allied Bank, data security is the thing that cannot be compromised at all. For this reason, the MIS department has taken stringent measures to ensure data security. The Corporate and Retail Department which deals primarily in confidential data of bank customers has taken numerous steps to avert security threats.

Employees have individual Ids and passwords that they use to log-in to the system database. But this does not mean that all the employees have same access to the data and information. There are proper hierarchy levels: which implies that there are gatekeepers at each level, supervising ‘who’ access ‘what’ data! Password protection is there to prevent just everybody from viewing confidential data.

Moreover, Allied Bank uses SSL certified encryption to secure its data channels. SSL (Secure Sockets Layer) is the standard security technology for establishing an encrypted link between a web server and a browser. This link ensures that all data passed between the web server and browsers remain private and integral. SSL is an industry standard and is used in the protection of online transactions with customers.

Encryption of data exchanged by customers and the bank ensures that data security, even if breached on its way, will make decrypting and understanding the data difficult.

Anti-virus and anti-spam packages like McAfee Anti-Virus are also installed to secure data against viruses, spam, etc.

There is also a Disaster Recovery System in place, in case of fire, raids, and other unforeseen and unexpected events. The backups are stored at both hot and cold sites. The head office in Lahore is the hot site. It is the central database of Allied Bank where all the transactions taking place in the eight hundred or so branches are recorded and updated on a real time basis.

The cold sites are at the twenty seven regional offices all over Pakistan. These cold sites are updated at appropriate intervals, on a weekly basis sometimes. In accordance with the State Bank of Pakistan regulation, data and information of three years is stored and maintained at these cold sites.

Also, USBs are widely used as potable storage devices.

Future Plans

Allied bank is planning to replace the current Core Business Solution ‘Uni Bank’ with ‘Temenos’.

This transformation is in its phase I. The software is being tested in one branch near the Head Office in Lahore. This testing phase will end on June 30th.

Training of employees is being conducted and further more sessions are in the pipeline

Allied bank plans to introduce Temenos in 107 branches out of the whole network of 800 braches within six months.

Implementation in further branches is still unplanned.

Allied Bank has opened its branch in Kashmir and plans to extend its network and reach in the remote areas of the country.

Recommendations

The disaster recovery system at Allied Bank is inappropriate to bear the load of 800 branches. There is one common hot site of all the branches at the Head Office and cold sites at the regional offices, 27 in number. But we feel that these backups are too less, keeping the current security scenario in view where banks have even been raided and burned by mobs. Therefore the backups should be set up at places other than the bank branches.

The training period for a batch of 50 people is three weeks on average. We feel that this is insufficient as the new banking system ‘Temenos’ has far complex procedures as the user interface is not friendly.

Proper temperature controls are needed for the server to operate efficiently. We feel that the current infrastructure is insufficient to support the system.

References

http://searchsecurity.techtarget.com/topics/0,295493,sid14_tax299811,00.html

http://tldp.org/HOWTO/SSL-Certificates-HOWTO/x64.html

http://en.wikipedia.org/wiki/Disaster_recovery

http://info.ssl.com/article.aspx?id=10241

http://www.occ.treas.gov/handbook/mis.pdf

http://www.temenos.com

http://www.abl.com.pk

http://www.oracle.com