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Page 1 of 11 Compiled Base Notes – For Students. Note: Student must refer the examples and class observation notes for class tests/final examination.
UNIT – II
(BASIC NOTES – MUST BE READ ALONG WITH CLASS OBSERVATION NOTES) Core banking solution Core Banking Solution (CBS) is networking of bank branches, which allows customers to manage their accounts, and use various banking facilities from any part of the world. In simple term, there is no need to visit your own branch to do banking transactions. You can do it from any location, any time. You can enjoy banking services from any branch of the bank which is on CBS network regardless of branch you have opened your account. For the bank which implements CBS, the customer becomes the bank’s customer instead of customer of particular branch. Execution of Core banking system across all branches helps to speed up most of the common transactions of bank and customer. In Core banking, the all branches access banking applications from centralized server which is hosted in secured datacentre. Banking software/application performs basic operations like maintaining transactions, balance of withdrawal & payment, interest calculations on deposits & loans etc. This banking applications are deployed on centralized server & can be accessed using internet from any location. CBS is required because: To meet the dynamically changing market & customer needs. To improve & simplify banking processes so that bank staff can focus on sales & marketing stuff. Convenience to customer as well as bank. To Speed up the banking transactions. To expand presence in rural & remote areas. Basic elements of CBS that helps customers are: Internet Banking Mobile Banking ATM POS & kiosk systems Fund Transfers – NEFT, RTGS
Page 2 of 11 Compiled Base Notes – For Students. Note: Student must refer the examples and class observation notes for class tests/final examination. Benefits of Core banking – Core banking solutions are beneficial to both banks as well as customers. A] Benefits for Customers Quicker services at the bank counters for routine transactions like cash deposits, withdrawal, passbooks, statement of accounts, demand drafts etc. Anywhere banking by eliminating branch banking. Provision of banking services 24 X 7. Fast payment processing through Internet banking, mobile banking. Anytime anywhere banking through ATMs. All branches access applications from central servers/datacentre, so deposits made in any branch reflects immediately and customer can withdraw money from any other branch throughout the world. CBS is very helpful to people living in rural areas. The farmers can receive e-payments towards subsidy etc. in his account directly. Transfer of funds from the cities to the villages and vice versa will be done easily. B] Benefits for Banks Process standardization within bank & branches. Retention of customers through better customer service. Accuracy in transactions & minimization of errors. Improved management of documentation & records – having centralized databases results in quick gathering of data & MIS reports. Ease in submission of various reports to the Government & Regulatory boards like RBI. Convenience in opening accounts, processing cash, servicing loans, calculating interest, implementing change in policies like changing interest rates etc. Creation of Primary Data Centre. A data centre is a physical facility that organizations use to house their critical applications and data. A data centre's design is based on a network of computing and storage resources that enable the delivery of shared applications and data.
Page 4 of 11 Compiled Base Notes – For Students. Note: Student must refer the examples and class observation notes for class tests/final examination. Some of the first servers were mainframe computers or minicomputers. Minicomputers were much smaller than mainframe computers, hence the name. However, as technology progressed, they ended up becoming much larger. Initially, such servers were connected to clients known as terminals that did not do any actual computing. These terminals, referred to as dumb terminals, existed simply to accept input via a keyboard or card reader and to return the results of any computations to a display screen or printer. The actual computing was done on the server. Later, servers were often single, powerful computers connected over a network to a set of less- powerful client computers. This network architecture is often referred to as the client-server model, in which both the client computer and the server possess computing power, but certain tasks are delegated to servers. In previous computing models, such as the mainframe-terminal model, the mainframe did act as a server even though it wasn’t referred to by that name. As technology has evolved, the definition of a server has evolved with it. These days, a server may be nothing more than software running on one or more physical computing devices. Such servers are often referred to as virtual servers. Originally, virtual servers were used to increase the number of server functions a single hardware server could do. Today, virtual servers are often run by a third-party on hardware across the Internet in an arrangement called cloud computing. Back up and DRS sites The backup and DRS sites decision is obviously left to the companies themselves – and such decisions cannot be made based on someone’s feeling, but on a study. In this case, a study is called “risk assessment,” and its purpose is to take into account all the relevant factors. Here are the factors that tend to push the DRS location further away : Earthquakes – if your location is in a seismic-sensitive area Floods – you should position an alternative site out of the same flood plain Tsunamis – you shouldn’t place both primary and secondary location on the coast of an ocean.
Page 5 of 11 Compiled Base Notes – For Students. Note: Student must refer the examples and class observation notes for class tests/final examination. Other natural disasters – e.g. Forest fires, Tornados/Hurricanes, Volcanos – if your primary site is close to such areas, the disaster recovery site should be further away Large industrial facilities , nuclear power plants , or military installations – again, at least one of your locations should be at a safe distance Dependence on the same source of electrical power – you should look for locations on a different power grid Even if your risk assessment proves none of the above is applicable to you, take into account risks like epidemic diseases – in such cases, authorities will likely close the whole metropolitan area. However, there are some factors that force you to position a disaster recovery location as close as possible : Telecommunication links – the further the sites are away, the more difficult it becomes (i.e. costlier) to replicate the data between these sites. If your employees are expected to travel to an alternative site in case of disaster – they have to be able to make it within the RTO ( Recovery Time Objective ); besides, the road between the sites shouldn’t be full of bridges and tunnels. Network monitoring. Network monitoring is a computer network's systematic effort to detect slow or failing network components, such as overloaded or crashed/frozen servers, failing routers, failed switches or other problematic devices. In the event of a network failure or similar outage, the network monitoring system alerts the Network Administrator (NA). Network monitoring is a subset of network management. Network monitoring is generally carried out through software applications and tools. Network monitoring services are widely used to detect whether a given Web server is functioning and connected properly to networks worldwide. Many servers that perform this function provide a more complete visualization of both the Internet and networks. While constantly monitoring the health/reliability of a network and searching for trends, the monitoring system tracks and logs network parameters. These include data transmission rate (throughput), error rates, downtime/uptime, use-time percentages, and response time to user
Page 7 of 11 Compiled Base Notes – For Students. Note: Student must refer the examples and class observation notes for class tests/final examination. improvements are achieved that are only for the betterment of the performance criteria such as costs, efficiency, quality and service. Implementing new technology – BPR strategy (Model 1). For example, an online webshop can choose to implement an extensive help centre with an interactive Q&A. The visitor can ask his or her question with the help of keywords and use the computer to look for a standardised answer. This way, the customer service employee won’t be occupied and can keep themselves busy with something else. Steps in the change process.
1. Create a vision. Before a process is reviewed or adjusted, there needs to be a clear picture of the reason for the change. It’s important that the customer is the focus of this vision. The objectives must then be clarified in qualitative and quantitative terms. If the objectives are clear, it’s important to convince the employees that the changes are necessary. 2. Select a team. A skilled team needs to be formed to get started with the changes and to minimise the chance of failure. It’s valuable to set up a diverse team because creativity is essential in analysing current business processes and developing new ones. For example, the problem is looked at from different perspectives and an accurate diagnosis is formed in the following steps. 3. Select and understand the current process. The complete current process needs to be mapped out in order to optimise it. This can be done by using flowcharts and software. KPIs (Key Performance Indicators) can then be linked to the relevant process in order to be able to monitor whether the process has the desired effect. This way, all matters that add no value to the process can be identified. These KPIs are compared in the following phases with the same indicators, but then for the new process. 4. Develop a new process. If the KPIs show that a current process is inefficient or ineffective, a new process must be drawn up. The customer-oriented vision from step 1 should be the guide here.
Page 8 of 11 Compiled Base Notes – For Students. Note: Student must refer the examples and class observation notes for class tests/final examination.
5. Implement a new process. Once the development and planning of the new process are complete, a small scale test can be run. If necessary, adjustments can then be made. The results and effects must be closely monitored with the KPIs. If it turns out that the new process works better than the previous one, it can be implemented on a larger scale. 6. Evaluate. In a highly dynamic environment, a lot of changes, so sometimes the indicators can give a different picture over time. By running an evaluation, inconsistencies are noticed sooner and can be adequately anticipated. Business Process Reengineering – Article for Practical Understanding. One of the best-known examples of organisations that used BPR in an effort to become more efficient is Ford, a car manufacturer. In the 1980s, the car industry went through a recession, and the managers at Ford decided to analyse the business processes thoroughly. They noticed that over 500 people worked in the accounting department. For comparison: around 100 people worked in the same department at their competitor Mazda. Despite Ford being a larger company, they decided to reduce the number of employees in that department to just a couple hundred people. Ford put together a team that started to analyse the processes. Originally, separate invoices had to be made for all ordered materials that were sent from the purchasing department to the accounting department. When the materials were delivered, Ford received an invoice from the supplier. This was compared with the invoice that the purchasing department sent to the accounting department and then was paid manually. Instead of making minor changes, Ford developed a completely new process. Information technology played an important role in this new process. They developed a database in which a notification was sent when the purchasing department had placed an order. When the
Page 10 of 11 Compiled Base Notes – For Students. Note: Student must refer the examples and class observation notes for class tests/final examination. customer preferences. But it can be difficult to determine how each channel is performing - it is even more difficult to compare performance amongst the market. Few of the Alternative Delivery Channels in Banks are as follows. _Note: Roving Staff means Moving and not being in a single location._* Post Migration Audit What is Data Migration? Data migration is the process of moving stored digital information between computers, systems, or formats. Data migration occurs for a number of reasons, including server replacement or maintenance, a change of data centres, data consolidation projects and system upgrades. As much of a company’s corporate knowledge and business intelligence is contained in its data, any data migration project must be done carefully to minimize risks. The process can vary from bank to bank however the following steps are followed in most of the data migration process. Extraction: remove data from the current system to begin working on it. Transformation: match data to its new forms, ensure that metadata reflects the data in each field. Cleansing: de-duplicate, run tests, and address any corrupted data. Validation: test and re-test that moving the data to the target location provides the expected response. Loading: transfer data into the new system, and review for errors again. Post-migration audit: final verification of data post-migration of data.
Page 11 of 11 Compiled Base Notes – For Students. Note: Student must refer the examples and class observation notes for class tests/final examination. Post Migration Audit Process. An audit process executed once the data migration process is ended in bank branches. After the introduction of Core Banking Solution software’s and due to change in CBS software’s or standardisation of data, this post-migration audit becomes an integral part of life. ==================
