Data Base Management System . What are the reasons for using DBMS in banking sector.

What is DBMS? What are the reasons for using DBMS in banking sector?

👉Database management systems are specifically designed for the storage and retrieval of (large amounts of) 

data. Banks handle large amounts of data. A DBMS enables them to store that data, operate on it, and 

retrieve it when needed, fast enough for their and their customer’s needs.

 

Most banks use a DBMS type called “relational” (RDBMS for short). These reasons are abbreviated ACID, 

for the four properties that every RDBMS Data base management system places above all else:

1. Atomicity: When multiple changes are declared part of a single transaction, then all of them will 

fail or all will succeed; never a part. So if I transfer money to you and the computer fails after 

debiting my account but before crediting yours, then the RDBMS will ensure that, once the 

server is restarted, either the rest of the transaction completes or (usually) the part that was 

already done is undone. 



2. Consistency: Certain business rules can be declared within the database and then the RDBMS 

ensures that these will never be violated. Things such as not being able to enter a transfer order 

from an account number that does not exist, or not being able to enter a transfer order with a 

negative amount.

3. Isolation: For each user, it appears as if they are the sole user of the database; in other words 

you will never “see” unfinished work from other users. When one clerk processes a transfer of 

$10,000 from your checking account to your savings account and another clerk looks at your 

value, he can either see the reality as it was before the transfer started (lot of money in the 

checking account, no money in the savings account), or after (empty checking account, saving 

account at $10,000); but never the “halfway completed” version where the money is in 

transfer and you appear to have suddenly lost your credit rating.