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[Solved] Organisational Structure of Barclays Bank - Essay

Task 1

Overview

The Barclays Bank is one of the oldest operating bank of the World. It incepted in 1690’s and currently is headquartered in London as a public limited company with operations across the globe. Given the centurian growth of Barclays Bank it has diversified itself into Barclay Cards, Barclay investment Bank., Africa Bank and in other ventures of prominence. However, Barclays one of most notable aspects is its products and service assortments, that dominate the market with leading characteristics and features. Currently, Barclay is in person and corporate banking, in wealth and investment, in Barclay Cards and Africa investment – as its prime operational lines. Given its saturated establishment across retail, commercial, investment banking and investment management services, Barclays is using one of the most dynamic information system for the banking sector. In this section we shall be reviewing the information system of Barclays Bank with regard to its operational and functional departments functioning system. Our objective would to be analyze the functional mechanism of the information systems at its various levels, their inter-relationships and operational practices; so that we can gain deeper understanding of how the information systems at banking sectors complement their efficiency and effectiveness requirements. (Barclays, 2016) (Barclays PLC, 2014)

Organizational Structure

Barclays Bank define its organizational structure to be divided into front office and back office systems. Usually the client handling relation tasks and transactions are managed on the front office while the back office deals with trading services for inter organizational settings. Since the banking institutions have customers at all levels like consumer and retail, institutional and regulatory and others; banks like Barclays reorganize their service delivery based on customer orientation. Retail banking’s personal banking service is a front office function while the IT support for banking operation is fully back office function. However, credit lending or loan administration, at both the commercial and consumer levels are blend of both the front and back office functioning. (Mutua, 2012)

Functional Structure

Barclays core functioning departments are designed based on their customer orientation and product offerings homogeneity. It is not designed and structured based on basic variance of service attributes like marketing, customer relations or accounting and operations. Barclays functional units include retail banking, consumer lending, loan operations and private banking. The retail banking sections operates mostly to addresses personal banking needs and is tasked to promote all the financial banking products to the consumers. It comprises of services service checking, savings accounts, deposit certificates, debit cards, ATMs, branch information, cashiers check, personal banker, teller service and others like foreign exchange notary service. Besides in the consumer lending sections the service outputs are auto loan, mortgage, home equity and student loans and other similar term arrangements. These products are individualized based on their repayment capabilities, current earnings potentials and other subsequent factors. The third functional department is the loan operations department, it is set for industrial customers who have the need of money for large scale and commercial usage. It can be for purchase financing, project financing, construction financing and even if the loan proposal is that good, the bank itself can partner up with the project. These are mostly carried in commercial loan operations purpose. Lastly, Barclays last of the four operational department is the private banking. It is usually for customers who are having numbers of products subscribed with the expectation of the bank to act as their advisor. The core products include personal financial planning and investment advisory services, retirement planning, annuities and insurance and account management services.

Barclay’s Information System

Now given the services delivery model as well as the relevant architecture of the Barclays bank’s organizational functioning system, it is understandable that its information services has to meet all the demands its staffs face in course of their works. The traditional use of information systems in the form of data collection, data procession, information management and dissemination; certainly have key role to play but for the banking only services Barclays had to design customized solution. This is its built in database system which is updated at real time and the user interface based software systems that expedite the processes of banking procedures and transactions. According to (The World Bank, 2014) banking sectors information systems now have to be compliant with governance systems, institutional coordination, regulatory compliance, internal infrastructural compliance, human resources and application management. Thus, the Barclays bank’s information system not only work as the system but also stand as the operational manual for every single processes, systems and programs that are structurally necessary for the information system and also mandatory for the effective operation of the banking organization. (CISCO Systems Inc, 2007)

Functioning of the Information System in accordance with operational and functional performance

Now all these objectivities of information systems for Barclays bank mandate for sets of outputs like ease in doing business, quality in service and transaction and overall management of financial products. Banks in turn have customer system, account management system and service management system to get included in the information system. Furthermore, it has to fulfill the requirements of supply chain management, customer relationship management, transaction processing systems at operational support level. Then at knowledge management part the information system has to fulfil the requirements of professional support system, collaboration system and the knowledge management system. Lastly at the management support level the same system has to fulfill the requirements of management reporting system, decision support system and executive information system. All these have functional implications at banking operations. A bank like Barclays therefore implement its internal control, reflection of monetary policy, management of risk and the banking functions. It looks in complying and conducting financial systems regulatory compliance issues, payables and receivables, fixed assets and vault management system. These operations are reflected in general accounting and business processing. The same general accounting and business processing system also require reflecting banking and settlement system, portfolio management and payment system. (Barclays PLC, 2013)

Source: (Tegaralags & Rosdiana, 2011)

Given the above details, it is clear that whether it is Barclay or any other bank, developing or maintaining an information system on banking context is very challenging task. The above picture shows how the inputs turn into the output through different levels of operational functioning in the Barclay’s bank. According to the picture, inputs from the customers, that are mostly generated with the customer information system is transferred to three considerations. These are management decision support, application processing and transaction processing. When customer input involves planning system usage the customer input or order or instruction is generally moved to management decision system. If the nature of the customer input is related with deposit system or loan or any other relevant application then the request is processed at application processing system. The application processing system in turn of its assessment can transfer the request to transaction processing system. The transaction processing system then sends it either to automated teller machines, or to manned teller machines. Where extended transaction processing system is supported, the request is processed at the point of sales terminal. However, when the requests involves further processing it moves from application processing system to financial information system and from transaction processing system to financial information system. The financial information system functions as the last terminal for operational processing. It usually accepts and processes direct data entry for deposits or withdrawals or instruction, asset liability management and marketing models. And then it transfers the processed input into output to go through the same application and transaction processing system. Only where the input request matter for management decision, it goes thru the management decision systems to customer information system. (APTEAN, 2014)

Nowadays these information systems have also helped the Barclays bank to offer virtual services. Under the virtual infrastructure of it, customers with access to internet or other personal devices, kiosk application and ATM applications connect with bank’s distribution services. Barclays defined its distribution channel as a composition of call center, branch office information systems and internet applications – both the web and mobile based ones. The customers’ inputs then move to middle layer of the virtual infrastructure of the information system. The middle layer is again comprised of services like communication, authorization, security and registration; each having embedded functionalities like process service information system, commercial support information system and communication and contract information system. Upto the middle layer, it falls on the part of front office. When middle office functionalities are further carried, the banking usage of information services moves to back office. Here product information systems are then applied and managed according to customer profile details.

Now given the entire description of the Barclays bank information system it is apparent that it is not constructed as standalone mechanism but deeply linked with various internal and external purposes. It will not only support internal control, but also complete the people management, the documentation, the recordings, the technologies and procedures management by accountants and management personnel to solve problems of customers as well as of businesses. Thus, it provides control interventions for cost operations, generates daily cash position and gives management information and relevant data to make informed decisions. Forecasting future cash patterns, analyzing trends, streamlining of expenses and reporting of all necessary information are also covered with the implementation of information system at Barclays bank.

Task 2

Types of information system

According to (Zandbergen, 2015) an information system is defined with the subsets of hardware, software, databases, network and procedures. It mostly generates data and works with data so that the result of the information system can be qualified information that can help to find answer for critical decisions for the enterprise. Thus, information systems have two definitive usage; general purpose and the specialized purpose ones. Information systems that aim in managing general purposes like database administration and management is an example of general purpose information system while enterprise resource planning, geographical information system are instances of specialized information system. As such all kinds of data entry, processing, database maintenance, document and report generation and inquiry processing are basic functional characteristics of different types of information system on the basis of which they cannot be classified. Rather information systems are classified based on their level of usage in organizational span. It means senior managers at strategic level will have different information system usage while middle managers at the management level will look for other type of information system and lastly the operational managers at operational level will seek custom and dedicated solution based on their functional work area affiliation with sales and marketing, manufacturing and production, finance and accounting and human resources.

The information systems designed at developed for strategic levels typically support long range planning by the senior management while management level systems seek support in monitoring, controlling, decision making and in administrative management. Systems only at operational levels product routine answers. Thus, there are four types of information systems which are transaction processing system, management information system, decision support system and executive information systems. Some of the theorists also refer to a system as neutral networks systems, said author (Cress, 2009).

Source: (Cress, 2009)

Executive Information System

The executive information system works similar to the management information system. It collects, collates, stores and processes data to generate information only that are specific to that organizations contexts at real time and with accuracy. It combines data from both man and machine, from database and processes; for its information processing purposes. However, the executive information system also have the capabilities for scalable development, networking and to function as transitional base. Irrespective of its multimodality the executive information system remains as a vital aid for the enterprises in becoming efficient and effective. (Creps & O`Leary, 1994)

Management Information System

The management information uses data gathered, processed and generated from the transaction processing system to produce its management reports so that the managers can use the same report for their business decision making, problem solving and in practicing innovation and creativity. These reports produced by management information system are diversely different in their forms, formats and inception requirements. Some are summary, while others are ad hoc or special case reports. Though these reports are all different in forms, formats and from originating differences, they all serve the common purpose of increasing effectiveness and efficiency of the managerial activities. Thus, management information system becomes so vital. (The University of Arizona, 2016)

Decision Support System

Then the decision support system which is more analytical, statistical and usually used for gathering data to generate projections as well as models. This decision support system also comes in great help for the managers. Quality improvement and problem resolution usually remain as the prime result areas for such systems. (Power, 2007)

Transaction Processing System

The transaction processing system is unlike previous two systems because it is more related with collection, processing, storing, modifying, displaying transactions. Multiple transactions against multiple financial products for thousands of customers are single handedly managed and maintained with the transaction processing system. It is superfast, highly reliable and deeply linked with database system. All kinds of billing, salary, inventory, scheduling registration and other tasks are performed using the transaction processing system. (University of Missouri - St. Louis, 2014)

The other system referred here in above usually represent knowledge management system. It analyzes data, diagnoses transactions to produce recommendations. It is more interlinked between data and human judgment. (Koenig, 2012)

Trends in information system

At operational transaction processing systems inputs remain transactions and events which are processed by processing functionalities like sorting, listing, updating for outputs like lists, summaries and reports. Users for transactional processing systems are usually operational personnel and supervisors. At management information system inputs remain summary transaction data which are processed with processing functions like modeling and low level analysis to generate summary reports as outputs. Middle managers are ideal user of management information system. At decision support system level inputs remain optimized statistical analysis databases which are processed with functions of simulations, statistical analysis and interactivity for generating statistical test results and query responses as outputs. Professionals, staffs are the user for decision support system. Lastly at the executive information system aggregate date at internal and external levels are used as inputs which are again processed for functions like graphical simulations, interactivity for projections as output. Only senior managers are the users of decision support system. (Gomez, et al., 2010)

Now given the above variations with information system it is clear that information systems are subjective outcome of trends. The trend continued for decades and been contributed by different engineering capabilities besides hardware and networking solutions. So, information systems trending primarily remained influenced by the data, the hardware, the software, the people and the network. Secondly the information systems continued to evolve with time because the purpose of use remained widely different. Few wanted to use the system as IT control while others stressed on information requirement. These variations caused the information systems to be used for preventive, detective and deterrent purposes while some favored information availability, integrity, compliance, confidentiality and effectiveness to be more important. (Dadam, 2008)

These variations moved the information system a long way to produce diverse variants. It all started with data processing with electronic systems. Transaction processing, accounting applications and record keeping stood as the basic and universal requirements for early information systems based on data processing. Then the focus was particularly drawn on the reporting itself and its management usage. This became the era of management information systems growing from the electronic data processing. Between 1960 to 70s the management information systems started to generate reports in predefined format so that decision making can be eased. Later on in 1970s to 80s the information system evolved to center around decision support system. Interactivity of data to process, and manipulation of processing functionalities grew to be of greater organizational interests. From 1980s to 90s, a rapid boom been experienced in the trend of information system with inception of different types of information system with specialization and customization. A few of these information systems widely knew at the time were strategic information system, expert system, executive information system and the end user computing systems. Strategic  information systems focused on strategic products and services for competitive advantage; expert systems focused on knowledge based expert advice for the end users and the executive information systems focused on critical information for top management. Direct computing support of the users productivity and collaboration are provided with the end user computing system. Later on, specially since 1990s onwards, internet’s adoption across the globe redefined the information system fully. This has now became integrated ebusiness and ecommerce systems with global enterprise level operations. (Fayoumi, 2014)

Suitability of information system

Given the situation of Barclays bank we see it requires a blending of all the information system that have evolved with time. It is not only due to hardware, software or data related considerations, but also from the functional perspectives of abilities to electronically process data, statistically analyze the date and report generation. As Barclays bank is operating at multinational levels with all its financial and banking products for consumers at individual and corporate levels and have to comply with central bank and other compliance and regulative bodies; it will always need an unique information system that fulfills all its requirements. Virtualization of its banking services also mandate its ebusiness and ecommerce systems. Thus, when one is to identify the suitable information system for the Barclays bank, it would definitely be the combination of all the information systems that has evolved so far and as discussed in above sections. When such comprehensive information system is incorporated into Barclays bank it will deliver benefits of information, keep the cost of producing the information to low and will generate information that are of real value to the bank. Right information, right degree of accuracy, timeliness, right format, for right people and all in the most efficient and effective way becomes a norm with information system for Barclays bank. Information system gives Barclays bank a surety to its business continuity, innovation and growth by right depicting the customer loyalty paradigm, reveling automation efficiency, providing deeper insight to customers, increasing marketing and selling opportunities, visibility for profitability and more integrated collaboration with internal and external customers. As a result of all these Barclays bank remain successful in ensuring aid in decision making, better planning and controlling, leveraging core competencies, gaining objective and structural flexibilities and enhancing its own supply system. Thus, it can be concluded that the Barclays bank is having its unique and very own information system which fully meets its operational and functional requirements at all the three levels of its organizational system as well as across the product service offerings variations.

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