Computer systems used in Banking include system to process cheques and payments, the recording and updating of customer balances, electronic funds transfer and trading systems.
Each of these systems are very important to the Banks. They must be 100% reliable and accurate or large amounts of money could be lost. They must be securely backed up and safe from hacking and fraud. As a result, Banking systems are some of the most complex and expensive of all computer systems.
A detailed account of the cheque clearing process can be found here.
In summary, all UK banks subscribe to a central organisation called the Cheque and Credit clearing company. They use automated scanners to read the numbers on cheques using a combination of optical and magnetic readers. They create secure files for each bank indicating which cheques have been written. At the end of the day they total the amount that each bank owes the others based on the total volumes of cheques, this money is paid from bank to bank automatically. All cheques are sent through the postal system.
Electronic payements - BACS and FPS
Bacs Payment Schemes Limited (originally Bankers' Automated Clearing Services) is a United Kingdom scheme for the electronic processing of financial transactions. BACS direct debits and BACS direct credits are made using the BACS system. BACS payments take three working days to clear: they are entered into the system on the first day, processed on the second day, and cleared on the third day.
On 27 May 2008, the new Faster Payments Service (FPS) went live. This new system has improved money transfer speeds between different banks in the UK enabling account holders with one bank to make virtually instant payments to those with another bank.
Full Wikipedia article on BACS
Bank accounting systems
Bank accounting systems keep track of money flowing into and out of the bank and between individual accounts as payments are made. They must keep accurate track of money and allow a clear record, called a audit trail, to be kept so that inspectors (auditors) can check that everything has been properly recorded. These systems are very large, usually running on very big mainframe computers.
Trading systems allow Banks to buy and sell stocks, government bonds, currency and other expensive items. Banks aim to make a profit by buying and selling at just the right time, therefore in addition to being secure, trading systems must be fast. Enormous amounts of information flow between trading systems across the world.