Financial institutions depend on their ability to process large quantities of information quickly and accurately. For smaller institutions, such as microfinance institutions, establishing and managing systems to process information is especially difficult. Skilled and properly trained staff are scarce, funds are limited, and a lack of formal, documented, and enforced processes—the building blocks of back office systems—only add to the challenge.
To gather, analyze, and properly use financial data requires sound management information systems (MIS), also known as information systems or core banking systems. These capture and store data, process data to produce meaningful and relevant reports, and support operations by enforcing defined processes and providing an audit trail. While some small financial institutions use manual processes or Microsoft Excel-based systems, most institutions find that they benefit from using more complex, computerized MIS to ensure the accuracy and efficiency of managing large amounts of information.