Advantages of Core Banking Solution PDF

Preview

Summary

okay...

Description

Course Code: 508 Rural Financial Markets & Microfinance

Core Banking Solutions

Core Banking Solutions: Definition In general, the platform where communication technology and information technology are merged to suit core needs of banking is known as core banking solutions. In a broader sense, Core Banking Solution (CBS) are networking of branches, which enable customers to operate their accounts, and avail banking services from any branch of the bank on CBS network, regardless of where he maintains his account. It also enables banks to improve operations, reduce costs, and be prepared for growth. The customer is no more the customer of a Branch. He becomes the Bank’s Customer. Thus CBS is a step towards enhancing customer convenience through anywhere and anytime banking. At last, it can be concluded that Core banking solutions are banking applications on a platform enabling a phased, strategic approach using network of branches to ensure the core banking operations like records of transactions, passbook maintenance, interest calculations on loans and deposits, customer records, and records of balance of payments and withdrawals.

Advantages of Core Banking Solutions: 1. Advantages to Customers: All CBS branches are inter-connected with each other. Therefore, Customers of CBS branches can avail various banking facilities from any other CBS branch located anywhere in the world. The advantages to customers are: i.

To make enquiries about the balance; debit or credit entries in the account.

ii.

Easy to deposit and withdraw cash by tendering a cheque.

iii.

To get statement of account.

iv.

Quick transfer of funds from his account to some other account – his own or of third party, provided both accounts are in CBS branches.

v.

To obtain Demand Drafts or Banker’s Cheques from any branch on CBS – amount shall be online debited to his account.

vi.

Can easily maintain passbook

vii.

Customers can continue to use ATMs and other Delivery Channels, which are also interfaced with CBS platform.

All these aim to provide convenient, efficient, and high quality banking experience to the customers, comparable to world class standards.

Page | 1

Md. Saiful Islam, Lecturer-Finance and Banking- University of Barishal.

Course Code: 508 Rural Financial Markets & Microfinance

Core Banking Solutions

2. Advantages to Banks: i. ii. iii. iv. v. vi. vii. viii.

Substantial reduction of operation costs Easier introduction of new products Faster customer service Integration of all products and services leading to improved risk management Mitigation of Operational Risk Real-time transaction processing Scaling up of operations Availability of e-trade options to bank customers Efficient and easy transactions which can be conducted 24/7

Core banking roadblocks: Banks need to focus on key factors, which make the core banking transformation a successful experience. The key challenges in core banking solutions or transformation are: i.

Regulations and Compliance requirements: Fresh regulations and compliance requirements, industry consolidation, delivering cost effective products and services, maintaining secure data platforms, meeting ever increasing customer demands and other strategic issues have all made banking far more complex than it used to be in the past. In order to handle increasing transaction volumes and do away with issues hovering around the current systems, banks need the right CBS in place.

ii.

Lack of IT Resources with Banks

iii.

Lack of Experienced Project Managers

iv.

Lack of Knowledge about the Proprietary Technology

v.

Missing Comprehensive Training Programs

vi.

No QC

vii.

No Stress or Automated Testing

viii.

Scope Creep: Scope creep occurs from the business users of the banks, as they do not have much idea about the new application, and they are used to the older application.

Page | 2

Md. Saiful Islam, Lecturer-Finance and Banking- University of Barishal.

Course Code: 508 Rural Financial Markets & Microfinance

Core Banking Solutions

Ways to overcome challenges: i.

Get the Right People Get the right people is the first way to overcome challenges of core banking solution. The employees have the following qualities:  Team oriented – taking everyone along  Offer creative solutions to problems thrown at them AND motivating others to think likewise  Take responsibilities and initiatives for things not directly under them AND encouraging others to do the same  Having fun in their work, AND making it fun for others equally well  Having a passion of success  Dedication towards the common goal  Technical experts and analytical minds  Ready and willing to challenge all assumptions; nothing taken for granted

ii.

Train Your Teams Ensure that your teams are trained to the max. There must be functional as well as technical training delivered to your teams. There is no other shortcut; there is no other way.

iii.

Introduce Quality Assurance and Quality Control QA and QC are different: QA deals with measures to ensure quality; it is proactive and is planned before the project begins. QC is reactive, and happens during or after the deliverables are churned out. There is a need of having people who could define the quality standards, with the help and input of business users.

iv.

Effective Source and Version Control While source control tools are available for modern languages, systems like Temenos T24/Globus come with their proprietary languages. You can still use version control software, and a procedure for file check-in and -out. Ensure that your people use versioning and source control religiously. Page | 3

Md. Saiful Islam, Lecturer-Finance and Banking- University of Barishal.

Course Code: 508 Rural Financial Markets & Microfinance

v.

Core Banking Solutions

Scope Finalization Things will always evolve. The users would think of new possibilities, or realize that they were mistaken in mentioning the requirements the way they did. Therefore, the requirements document will be a living document (if there is one).

vi.

Use Some Quality Control Tools There is a wide variety of tools available in the market: IBM Rational, HP LoadRunner, Validata, FrontOffice Technologies and WebLoad. Use them to test your applications’ operating limits.

vii.

Keep an Audit Trail of Requirements and Features You need to record every piece of information that related to the project, its modules and the user requirements. Use some tool to collect and classify information. It will help to keep an audit trail of requirements and features.

viii.

Take Care of the Human Aspect of Things Ultimately, it is more of people management than technical management. Ensure that your team is performing at its optimum, and there are no frictional issues between them. Keep the environment lively but professional. Mix experience with fresh blood in your teams. This way, you will have the maturity and agility, which is the mix that you require most.

Page | 4

Md. Saiful Islam, Lecturer-Finance and Banking- University of Barishal....