Databases Used by Banks

Databases are undoubtedly utilized in corporate applications and financial activities, but they are also employed in other contexts. Databases are used by your favorite apparel business, bank, video rental shop, and grocery store to maintain track of customer, inventory, staff, and accounting data. Many areas of your daily life use databases, which make it simple and quick to store data. This article’s content was obtained from a database and displayed in your browser.

Database definition

A data bank, also known as a databank, is a repository of information on one or more subjects that is arranged in database management and information architecture to make it easier to access information locally or remotely and to handle numerous ongoing inquiries over an extended period of time. A company whose major focus is the creation and upkeep of such a database is sometimes referred to as a data bank.

A data bank may be centralized or decentralized, however due to the connection with a bank of money, the majority of usage of this phrase refers to centralized information storage and retrieval. A data bank may contain everything from scientific data, such as global temperature readings, to governmental data, such as census figures, to records from the financial system, such as credit card transactions, or the merchandise offered by multiple suppliers.

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RDMBSs

Database management systems store and retrieve (lots of) data. Banks manage a lot of data. A DBMS lets them store, manipulate, and retrieve data rapidly enough for them and their customers. 

Not quite. Most banks utilize “relational” DBMS for good reason. ACID stands for the four qualities any RDBMS prioritizes:

* Atomicity: When several modifications are part of a single transaction, they all fail or all succeed; never a portion. If I transfer money to you and the computer fails after debiting my account but before crediting yours, the RDBMS will guarantee that the rest of the transaction completes or (typically) the portion that was previously done is undone. My account can never “disappear” since yours isn’t credited.

* Consistency: The RDBMS ensures that business rules stated in the database are never broken. Not being able to enter a transfer order with a nonexistent account number or negative amount.

* Isolation: Each user seems to be the only user of the database; you won’t “see” unfinished work by other users. When one clerk transfers 100,000 from your checking account to your savings account and another clerk looks at your value, he can see the reality as it was before (lots of money in the checking account, no money in the savings account) or after (empty checking account, 100,000 in the savings account), but never the “halfway completed” version where the money is in transfer and you appear to have lost your credit rating. (The transfer clerk may observe the interim state because it’s part of HIS transaction.)

Once a transaction is reported as complete, the RDBMS guarantees the changes are permanent. So if someone transfers money from another bank to your account and your bank has a power outage, either it happens before the other bank gets acknowledgement (and they’ll know to wait and retry) or the other bank gets confirmation and the RDBMS guarantees that the credit to your account is not lost. Without the “D” of ACID, you might lose power if the modification is in memory but not yet written to hard drive or other permanent store.

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Banking database example

Traditional relational databases will always be used by banks in their IT infrastructure, where they can serve as valuable systems of record. In a digital economy, where the customer experience is everything, however, banks will look more and more to make IoT, mobile, and AI apps and integrate them. To match, these apps need a database, which can also be used as a way to get people interested. Non-relational (NoSQL) database technology comes into the market at this point. NoSQL is better than traditional relational databases (SQL) for tasks that need fast access to data from a variety of sources and systems that can adapt to changing market conditions. Not only can NoSQL databases grow quickly, but they can also solve data management problems with little cost in time and money.

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Conclusion

Banks, like the majority of contemporary companies, utilize a variety of database systems that are mostly chosen based on how well suited they are to the project at hand. However, one of the four main RDBMS systems—Oracle, Informix, DB2, or MS SQL Server—houses their mission-critical databases, which monitor and handle both your money and theirs.