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Introduction
Information technology has had as much impact on our society as the industrial revolution.
In the information age, companies are finding that success or failure is increasingly
dependent on their management and use of information. Therefore, companies need a good
information system that enabled an efficient and effective use of information to give them
more competitive advantage (Moscove, Simkin, & Bagranoff, 1999).
An information system is a set of interrelated subsystems that work together to collect,
process, store, transform, and distribute information for planning, decisions making, and
control. An information system need not be a computerized system, but the use of
computer in information systems can improve the efficiency of information collection,
processing, storing, transformation and distribution. An accounting information system
(AIS) is the information subsystem within an organisation that accumulates information
from the entitys various subsystems and communicates it to the organisations information
processing subsystem. The information processing subsystem is likely to be a separate
department in the organisational entity that is responsible for computer hardware and
software (Moscove, Simkin, & Bagranoff, 1999). The AIS has traditionally focused on
collecting, processing, and communicating financial-oriented information to a companys
external parties (such as investors, creditors, and tax agencies) and internal parties
(principally management). Today, however, the AIS is concerned with non-financial as
well as financial data and information.
In general, a banks AIS has the same role as in other companies that is to provide financial
and non-financial information to the companys external parties (such as investors,
creditors, and tax agencies) and internal parties (principally management). However, due
to the characteristics of banking business, banks AIS have specific important features
related to their liquidity management and the management of their customers accounts
information.
A bank has to manage its liquidity efficiently in order to maximize profit and to fulfil
regulation requirements (minimum reserve requirement). To perform such duties, the
treasury manager needs information of consolidated balance of customers deposits, loans
and other placements of bank funds. Those information are needed on a daily basis so that
the treasury manager can determine how much reserve is needed and how much money
should be placed in or borrowed from the money market to conform with the regulations
and to maximize the usefulness of available funds. The use of computer network has made
it possible for the treasury managers to get the information needed almost at anytime if all
of the banks branches are online. Therefore, the banks liquidity management could be
performed more timely and efficiently based on accurate information (Deakin, Goddard &
Welch, 1999).
Among reasons why people use a banks services are to obtain convenient access to cash
and to obtain interest payments and other return on investment. The banks serve the needs
of the customers by providing a system that enables the customers to check their account
balance, to deposit and to withdraw cash, and to make payment in a convenient way. The
system must also provide up to date and accurate information of customers account. The
introduction of information technology had improved the quality of banks services to the
customers. Various new banks services, which are made possible by the use of information
technology in their AIS, are usually called electronic banking.
History of Electronic Banking
Banking technology appears to have been applied first at the centre of the United States
banking system. One of the earliest uses of electronic technology was the Federal Reserve
Communication System (Fed Wire), which recorded over 700,000 transfers in 1920. Fed
wire is used to transfer reserve account balances from one institution to another, which
makes it a very specialist electronic banking service. However it sits at the centre of US
bank clearing systems. Electronic technology spreads from this central point through the
whole process of bank funds transmissions, finally reaching outside the banks direct to
retail customers and corporate treasuries.
Electronic banking started in the United States because the clearing arrangements between
the large numbers of geographically dispersed US banks was extremely inefficient.
Corporate customer pressure for improvements was becoming irresistible. In addition, the
early availability of cheap computing power encouraged pioneering work in the United
States to achieve savings from more efficient use of the banking system. The creative use
of the emerging technology, which had been developed for other purposes, and paid for by
other industries research budgets, was fundamental to the progress of electronic banking
and the significant savings achieved thereby. The American banks did not have it all their
own way. The first ATMs in the world were introduced to the public in the United
Kingdom by Barclays Bank in 1969. Once customers became familiar with them, they
spread rapidly. By 1985, 160,000 units were run by banks worldwide, with about 9,000 in
the United Kingdom (Deakin, Goddard & Welch, 1999).
By 1990, the pace of change had started to accelerate " electronic banking had become the
norm in corporate treasuries with electronic links between balance reporting systems and
second-generation treasury management system or spreadsheets and from treasury systems
to payment systems. The banks had invested in improved security and extended services to
corporate, at the same time as presenting a rapidly changing electronic face to retail
customers. The move to telephone based everyday retail services, such as First Direct
(from Midland) and NatWests telephone payment system Action Line in the UK, meant
that the use of technology in banking was now an accepted part of many peoples
experience.
In consequence, corporate treasuries confidence in electronic systems increased rapidly. At
the same time their requirements were becoming more sophisticated in line with the
