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MIS Updated Topics-Quick Revision Notes

The document discusses key concepts related to system concepts, digital transactions, and fintech. It covers hardware components, input/output devices, storage devices, boundaries, interfaces, control systems, and key pillars of fintech like blockchain, AI, and APIs. Fintech infrastructure and startups leveraging this infrastructure are also explained.
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0% found this document useful (0 votes)
11 views8 pages

MIS Updated Topics-Quick Revision Notes

The document discusses key concepts related to system concepts, digital transactions, and fintech. It covers hardware components, input/output devices, storage devices, boundaries, interfaces, control systems, and key pillars of fintech like blockchain, AI, and APIs. Fintech infrastructure and startups leveraging this infrastructure are also explained.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1

Chapter’s Covered In This:


SYSTEM CONCEPTS, DIGITAL TRANSACTIONS,
FINTECH
Hardware:
Consists of electronic devices, you can see & touch.
Term "device" refers to any piece of hardware used by a computer such as keyboard, mouse,
monitor etc. “Peripheral devices are those which are not directly attached to computers."
Hardware categorized as:
1. Processor: Processor or C.P.U consists of one or more chips attached to the motherboard.
Processing is the procedure that transforms raw data into useful information; this function is
divided between computer's processor and memory.
P-IV = 1.6 to 3.2 GHz
Dual core = (2) processors of 3.2 GHz
Core to duo= 2 core
Multi core = Core I3, Core I5, Core I7
2. Memory: A set of chips attached to the motherboard to store data temporarily and
permanently, like RAM ROM.
-RAM is a volatile memory meaning it holds data only when power is turned on, when power is
turned off it loses its contents.
SIMM=Single In-line Memory Module (1MB)
DIMM=Dual In-line Memory Module (4-32MB)
SDRAM=Synchronous dynamic RAM (32-512 MB)
DDR1, DDR2, DDR3, DDR4=Double Data Rate

The smallest usable unit of measurement for memory is the byte, computer work with larger
chunks of data, measured in multiple bytes:
1024 byte=1 KB
1024 KB=1MB
1024 MB=1GB
1024 GB=1TB
1024 TB=1 Petabyte

-ROM is non-volatile memory; it holds data even when power is turned off.
BIOS=Basic Input and Output System, ROM, EROM, EEPROM=Electrically Erasable
Programmable ROM, USB, SD card
3. Input/output Devices: Input devices are those which accept data and instructions from a
user and another computer Output devices are those which return processed data back to the
user or another computer Communication devices perform both input and output functions like
ATM, Mobile phones etc.
4. Storage Devices: Holds data not currently being used by the C.P.U, data is commonly
stored on magnetic or optical disk.
2

Each data uses a special medium for storing data on its surface.
-Magnetic Storage Devices: A device that reads data from magnetic plates and writes to a
disk in the form of binary numbers with the help of headers upon each of them.
E.g. floppy, hard disk, tape drive etc.
-Optical Storage Devices: Optical disks read data from a sensor of a glass lens by burning the
tiny holes on the disk. Most common are CD, DVD, and Blue-Ray.
-Solid State Drive: SSDs store data permanently inside an integrated circuit, typically using
flash memory. The flash memory inside an SSD means data is written, transferred, and erased
electronically and silently

Boundary and Interfaces:


“Boundary" refers to the delineation between a system and its environment. It defines what is
included within the system and what lies outside of it. The boundary helps in understanding and
defining the scope of the system, including its inputs, outputs, and interactions with the external
environment.

“Interface" in system concepts refers to the point of interaction or communication between


different components or systems. Interfaces allow for the exchange of data, commands, or
signals between different parts of a system or between separate systems. Interfaces can be
physical, such as connectors or ports, or they can be logical, involving protocols or APIs
(Application Programming Interfaces).

Environment:
"Environment" refers to the external context in which a system operates. The environment
encompasses all the factors, entities, and conditions that can influence or be influenced by the
system.

Internal environmental factors: They originate within the organization, like culture and
resources, religion, cross border

External environmental factors: external factors come from outside, such as rules and
regulations from the government.

Control:
The process of regulating or influencing system behavior to achieve desired outcomes. Control
mechanisms monitor system performance, compare it to desired standards or goals, and make
adjustments as necessary.
Types of Controls.
1) Feedback Control: The process of management using historical data to improve present
and future performance.

Steps in feedback control:


1) Monitoring
3

2) Comparing
3) Analysis
4) Correction

2) Feed forward Control: It is a proactive approach in which the current situation is analyzed
to predict upcoming problems

Steps in feed forward control:


1) Anticipation
2) Planning
3) Implementation
4) Monitoring

Synergy:
When two or more departments/organizations collectively make a plan and implement it for the
benefits of both org/dept. Its benefit is more in collective working than in doing it individually.

Coupling:
The degree of interdependence between different components or modules within a system. It
measures how closely connected or reliant one part of the system is on another. There are
several types of coupling:

Tight Coupling: In tight coupling, components are highly dependent on each other, meaning
changes to one component often require corresponding changes to others.

Loose Coupling: Loose coupling indicates a lower level of interdependence between


components. Changes to one component have minimal impact on others

Cohesion:
The degree to which the elements within a module or component are related to each other. It
measures how strongly the responsibilities of the elements within a module are related to each
other.
There are several types of cohesion:
1. Functional Cohesion: When components are integrated because they have to work on
one task.
2. Communicational Cohesion: When two or more components interact with each other
to share and store data.
3. Prosecutorial Cohesion: They are independent components and are a part of a larger
process.
4. Temporal Cohesion: When components of system are related and work at one time
5. Logical Cohesion: When all components are working on similar platforms/dates.
4

Fintech:
It is the combination of finance and technology that means using technology to provide financial
services.

Fintech Infrastructure: Fintech infrastructure is the technological backbone that facilitates the
delivery of financial services through digital channels.
This infrastructure is comprised of various components, including:
1) Payment Systems: These systems enable the transfer of funds between individuals,
businesses, and financial institutions. They include traditional payment networks like
credit/debit card networks, Automated Clearing House (ACH) systems
2) Banking APIs: Application Programming Interfaces (APIs) provided by banks
and financial institutions allow Fintech startups to securely access banking data and
services.
3) Block chain Networks: Block chain technology provides decentralized, transparent,
and secure transaction processing.
4) Data Analytics Platforms: Data analytics tools and platforms enable Fintech startups
to analyze vast amounts of financial data to derive insights, identify patterns, and make
data-driven decisions.
5) Cybersecurity Measures: With the increasing digitization of financial services, robust
cybersecurity measures are essential to protect sensitive financial data and prevent
unauthorized access, fraud, and cyberattacks

Fintech startups: Fintech startups leverage this infrastructure to develop innovative solutions
that address various challenges and inefficiencies in the financial industry. These startups often
focus on disrupting traditional financial services by offering:
1) Digital Banking: Fintech startups develop mobile banking apps, digital-only banks, and
non-banks that provide convenient, user-friendly, and cost-effective alternatives to
traditional brick-and-mortar banks.
2) Payments and Remittances: Startups create peer-to-peer payment apps, mobile
wallets, and cross-border remittance platforms that enable users to send and receive
money quickly, securely
3) Lending and Credit: Fintech startups offer online lending platforms, peer-to-peer
lending marketplaces, and alternative credit scoring algorithms that streamline the
lending process
4) Investment and Wealth Management: Startups develop robo-advisors, automated
investment platforms, and social trading networks that use algorithms and artificial
intelligence to provide personalized investment advice, portfolio management, and
trading services at lower fees than traditional financial advisors.
5) Insurtech: Fintech startups in the insurance technology (insurtech) space leverage
technology to digitize insurance processes, offer innovative insurance products, and
improve underwriting, claims processing, and risk management.
5

Key technological Pillars:


● Block Chain
● Artificial intelligence
● Big Data analysis
● Cloud Computing
● Application Programing Interfaces(API)
● Mobile Technology
● Biometric and Authentication
● Regulatory Technology

Automation and Artificial intelligence (AI): Automation and artificial intelligence have
proven to be highly effective in various domains, including finance, healthcare, manufacturing,
customer service, and many others. Some key benefits of automation and AI include:
● Increased Efficiency
● Cost Savings
● Enhanced Accuracy
● Improved Customer Experience
● Innovation and New Opportunities
● Risk Reduction

Big Data:
It refers to large volumes of structured, semi-structured, and unstructured data that are
generated at high velocity and vary in variety. These datasets are too complex and massive to
be processed and analyzed using traditional data processing techniques. Big Data typically
exhibit the following characteristics, known as the 3Vs:

Volume: Big Data involves vast amounts of data, often ranging from terabytes to exabytes in
size, generated from various sources such as sensors, social media, transactional systems, and
digital devices.
Velocity: Data is generated and collected at high speeds, requiring real-time or near-real-time
processing and analysis to derive timely insights and actions.
Variety: Big Data encompasses diverse types of data, including structured data (e.g.,
databases, spreadsheets), semi-structured data (e.g., XML, JSON), and unstructured data (e.g.,
text, images, videos).

Application of Big Data and data analytics in accountancy and audit can significantly
improve effectiveness in several ways:
1) Enhanced Risk Assessment: Big Data analytics enable auditors to analyze large
volumes of financial and non-financial data to identify patterns, anomalies, and potential
risks.
6

2) Improved Fraud Detection: Big Data analytics can help auditors identify suspicious
transactions, irregular patterns, and potential fraud indicators that may go unnoticed with
traditional audit methods.
3) Real-time Monitoring: Big Data technologies enable real-time monitoring of financial
transactions and business processes, allowing auditors to detect issues and anomalies
as they occur.
4) Predictive Analytics: Big Data analytics can be used for predictive modeling and
forecasting to anticipate future trends, risks, and opportunities.
5) Automation and Efficiency: Big Data technologies automate data collection,
processing, and analysis, reducing manual efforts and improving audit efficiency.

Block chain:
Design: Block chain is a decentralized, distributed ledger technology that records transactions
across a network of computers in a secure and immutable manner. Each transaction is stored in
a "block" that is linked to the previous block, forming a chain of blocks.
Uses: Block chain technology is used in various applications, including cryptocurrency
transactions, supply chain management, voting systems, digital identity verification, smart
contracts, and decentralized finance (DeFi).
Limitations: Some limitations of block chain include scalability issues, high energy consumption
(in proof-of-work consensus mechanisms), regulatory uncertainties, and potential security
vulnerabilities in smart contracts.

Cryptocurrencies:
Design: Cryptocurrencies are digital or virtual currencies that use cryptography for secure and
decentralized transactions. They are typically based on block chain technology and operate
independently of central banks or governments.
Uses: Cryptocurrencies are used for various purposes, including peer-to-peer transactions,
remittances, online purchases, investment and speculation, fundraising.
Limitations: Some limitations of cryptocurrencies include price volatility, lack of regulation and
consumer protection, potential for fraud and scams, scalability challenges.

Crowdfunding:
Design: Crowdfunding is a method of raising funds from a large number of people (the "crowd")
through online platforms. It typically involves soliciting small contributions from a large number
of individuals to finance a project, business, or cause.
Uses: Crowdfunding is used for various purposes, including startup financing, product
development, creative projects (e.g., films, music albums), charitable donations, and community
initiatives.
Limitations: Some limitations of crowdfunding include regulatory constraints (e.g., limitations on
who can invest, crowdfunding platform requirements), competition for attention and funding,
risks of project failure or fraud.

Other Alternative Finance Technologies:


7

Design: Other alternative finance technologies include peer-to-peer lending (P2P lending),
equity crowdfunding, decentralized finance (DeFi) platforms, digital wallets, payment processing
solutions, and robo-advisors.
Uses: These technologies offer alternative methods of accessing financing, investing,
investment portfolios, and automate financial management processes and managing financial
assets.
Limitations: Limitations vary depending on the specific technology but may include regulatory
challenges, liquidity risks, counterparty risks, platform reliability and security concerns, lack of
investor protection.

Key features of Block chain:


1. Decentralization: Block chain operates on a decentralized network of computers (nodes)
2. Immutability: Once data is recorded on the block chain, it cannot be altered or tampered
3. Transparency: Transactions on the block chain are transparent and visible
4. Security: Block chain uses cryptographic techniques to secure transactions and prevent
unauthorized access.
5. Consensus Mechanisms: Block chain employs consensus mechanisms (e.g., proof-of-
work, proof-of-stake) to validate and confirm transactions.

Applications of Block chain:


1. Cryptocurrencies: Block chain technology powers cryptocurrencies like Bitcoin and
Ethereal.
2. Smart Contracts: Block chain-based smart contracts are self-executing contracts with
predefined conditions and automated enforcement
3. Supply Chain Management: Block chain can be used to track and trace products
throughout the supply chain, providing transparency, traceability and Accountability.
4. Digital Identity Verification: Block chain enables secure and decentralized digital identity
verification, allowing individuals to control their personal data
5. Voting Systems: Block chain-based voting systems provide secure and transparent
voting processes
6. Financial Services
7. Real Estate

Accounting for cryptocurrencies:


It involves recording, reporting, and analyzing transactions involving digital assets such as
Bitcoin, Ethereal, and other cryptocurrencies. Here's how accounting principles are applied to
cryptocurrencies:
1. Recognition: Cryptocurrencies are recognized as assets on the balance sheet at their
fair market value on the date of acquisition
2. Valuation: Cryptocurrencies are valued at fair market value, which is typically determined
based on the exchange rate prevailing at the transaction date.
3. Measurement: Transactions involving cryptocurrencies are measured and recorded in
the organization's accounting records. This includes purchases, sales, exchanges, and
transfers of cryptocurrencies
8

4. Recording Transactions: When a transaction occurs involving cryptocurrencies, such as


the purchase of goods or services using Bitcoin, the transaction is recorded in the
accounting system.
5. Recognition of Gains and Losses: Gains or losses resulting from changes in the value of
cryptocurrencies are recognized in the income statement.
6. Impairment: If the fair value of a cryptocurrency asset declines below its carrying
amount, an impairment loss is recognized in the income statement
7. Disclosure: Entities are required to disclose information about their holdings of
cryptocurrencies, including the nature and extent of their exposure to cryptocurrencies
8. Taxation: Entities should comply with relevant tax regulations and report cryptocurrency
transactions accurately to tax authorities.

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