Technology Glossary

Automatic teller machines (ATMs) - Machines that dispense cash or provide a wider range of services to cardholders. ATMs are relatively expensive to own and operate. Most require network connectivity and reliable power.

Banking agent - Retail, lottery, and postal outlets that work on behalf of a financial institution and let clients deposit, withdraw, and transfer funds, pay their bills, inquire about account balance and perform other services typically provided by a financial institution.

Biometrics - A technology that measures an individual’s unique physical characteristics, such as fingerprints, to recognize and confirm identity for security purposes.

Branchless banking - Delivery of financial services outside of conventional bank branches using information and communication technologies and nonbank retail agents, such as card-based networks or mobile phones.

Connectivity - Network connections such as dial-up, broadband, or satellite, that link staff and branches for real-time information exchange, transaction processing, and distance learning.

Credit scoring - Automating or enhancing the loan approval process by computerized analysis of client characteristics and behavior to predict willingness and ability to repay.

Magstripe and smart cards - Debit (or sometimes credit) cards that store customer information and account balances. These cards allow customers to access their accounts online via ATMs and POS devices. Smart cards have an embedded chip that stores complex information, allowing customers to complete transactions using remote devices that do not have an online real-time connection with the central server.

Management information system (MIS) - A management information system, known as an MIS or simply IS, involves all aspects of gathering, storing, tracking, retrieving and using information within a business or organization. Custom-built or commercially available software allows financial institutions to automate some of these functions, such as tracking transactions and creating reliable financial and operational reports. However, the software application itself is not the information system. All the policies, procedures, and practices that direct an organization's operations and the staff that interact with the information, combined with the software and hardware, comprise an information system.

Mobile banking: Delivery of banking services through mobile phones, also called m-banking. Millions of poor and low-income people have access to cell phones and increasingly use text messaging. This technology offers an opportunity to operate virtual bank accounts with minimal infrastructure investments. A mobile phone can also be used as a POS device by merchants and market vendors. Examples of mobile operators include WIZZIT in South Africa, Smart Communications and Globe Telecom (G-Cash) in the Philippines, Safaricom in Kenya (M-Pesa) and A Little World in India.

Personal digital assistants (PDAs): Small handheld computers that help field staff more efficiently collect data, manage client records, and process loans.

POS devices: Devices or systems, usually in retail outlets, that perform electronic transfers from one account to another, often using cards. The device can be a card reader, mobile phone, personal computer (PC), barcode scanner, or any hardware that can identify customers and receive instructions for the transfer of value.

Transactional accounts: Accounts with three basic features: they are pre-funded (i.e. not credit accounts), balances are available on demand, and they are enabled primarily for electronic payments.