5 Feb, 2021

ERP Software for Banking Sector

Security and data management matters the most in the banking industry. Banking institutions do whatever it takes to stay away from data breaches and safeguard their customer data. 

ERP (Enterprise Resource Planning) software is a centralized platform that can store and analyze information while keeping it secured. These systems reduce manual errors and efficiently track all financial aspects of the organization. 

In this blog, we will discuss the need, benefits, and major modules to look for while considering ERP for Banks.

ERP for Banks - Necessary?

There is no room for fault in the banking industry, therefore banking facilities need state-of-the-art systems to ensure seamless operation.

1. Integrated Banking Procedures

ERP is a single platform where you can monitor and manage the core banking operations 24/7. Banking processes can be integrated and information streamlined across all branches and departments effortlessly. Repetitive tasks like data entry or report generation can all be automated. Thus freeing up essential resources that can then be allocated to more important areas.

2. Improved Data Security

A cloud ERP system has multiple intrusion detection systems in place to protect all your data.  ERPs now are also capable of monitoring all access points improving the overall security. Banks will have instantaneous alert systems through ERP and the admin will be alerted if suspicious activity is detected.

3. Low IT Costs

Moving from a legacy system to a cloud-based ERP with automated functionalities will reduce your IT budget considerably. The Total Cost of Ownership (TCO) is low compared to other systems because of reduced upfront costs.

4. Transparent Communication

ERP’s enable smooth collaboration between departments and colleagues because of efficient information flow. This ensures a disruption-free workflow which is key in the banking industry.

Benefits of Banking ERP

An ERP system is ideal for the banking industry because of its data-oriented nature.

• ERP can integrate various entities in the banking business and present information in a unified manner resulting in better productivity.

• Help make decisions on all fronts of the business. For instance, it can provide data-backed decisions in strategic, tactical, and operational planning.

• They also provide solutions for banking functions like - cash accounting, payment processing, etc. ERPs provide detailed custom reports and insights into the financial conditions of the banking enterprise.

• Back-office systems and other financial systems can be integrated into a single ERP system.

• Sharing various banking processes with key stakeholders like customers, vendors, and partners is made easy with ERP.

• All transactions can be monitored in real-time through ERP tools.

• ERP systems can improve the logistical capabilities of the business like handling non-banking goods, banknotes, etc.

Major Modules to Look for in Banking ERP

If you are choosing an ERP for your organization, make sure you find all the following modules in it.

1. Analytical Accounting

In the financial module of an ERP system, analytical accounting plays a significant role - linking all activities involved in cost and revenue. 

All the tools in the ERP system work in sync with each other, making it easier for the user to automate the bank thus simplifying the encoding process. 

The analytical accounting module is responsible for - accounts receivable, accounts payable, and general ledger and manages all the financials and transactions related to the bank. Certain advanced modules also support features like payroll management, time tracking, and tax reporting. ERP streamlines all the information available and this reduces manual errors and embezzlements. 

2. Asset Management

For effective asset management, several areas need to be fused and managed together. For example, the budget section may be linked with areas like planning and project management, and this may further be extended to departments that manage affairs. This improves the productivity of entire sections. Since all sub-components are connected - management becomes much easier. 

The asset management module also helps in monitoring the physical properties and assets of customers. This ensures that money is not lost due to the inefficiency of the management. Most ERPs accommodate the asset management module into their financial and accounting component of ERP.

3. Payment Management

Banking functions like encoding and payment approval is controlled through the payment management modules. This includes managing customer’s funds in all accounts. The payment management module also monitors currency conversions when payments are received in a foreign currency.

4. Customer Relationship Management (CRM)

In the banking sector, customers are the top priority. An ERP system can help maintain a loyal customer base through CRM. It can address various customer grievances of existing customers as well as take note of new lead inquiries. The CRM module is also capable of tracking and monitoring all marketing activities closely.

NetSuite ERP for Banks

NetSuite is capable of shouldering all the needs of a finance ERP. It can automate key tasks as well as integrate with various banking operations through its available set of tools like professional services automation (PSA), customer relationship management (CRM), Business Intelligence, financials, and more.

Top Benefits of NetSuite for Banks:

Real-time visibility: Have a quick look at the overall performance through intelligent dashboards. Improve decision making through detailed reports that drill-down to the last detail.

Improve agility: Mitigate risks and spot opportunities through predictive analytics, so that you stay competitive in the industry.

Boost productivity: NetSuite helps streamline operations and information thus reducing errors and duplication and enhances communication across departments.

Control Costs: Cost management can be done by integrating various banking functions like CRM, ERP, and HCM (Human Capital management). NetSuite does this by ensuring visibility across departments - so that each department understands the budgets they can work within real-time.
Audits: NetSuite maintains transparency to ensure regulatory compliance. It has real-time reporting and well-maintained audit trails to control all internal functions.

Forecasts: Projections of existing versus future results can be analyzed through NetSuite using on-going analysis.

Management: NetSuite ensures efficient management through up-to-date systems and a steady flow of information. All key stakeholders in the organization have access to real-time data thus keeping everyone on the same page.

If you are ready to implement NetSuite in your organization? Book a consultation with the NetSuite experts of Jobin & Jismi.