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7/29/2019 Banking Information System
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BANKING INFORMATION
SYSTEM
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TECHNOLOGY AND BANKING
Banking TechnologyInformation
Storage
ProcessingTransmission
Tasks Common to
Both
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Pervasive Branch
Network
Global Operations
Complex Credit
Calculations
Innovative Risk
Management
Mass Transaction
& Items Processing
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Focus aspects of Commercial Bankingnow are:
Core
Banking (CBS)
ATMs
CardManagement
Any Branch
BankingDocument
Management
Risk
Management
Resource
Management
MIS &
Intranet
CRM
Corporate
Network
Electronic
Banking
POS Terminalsand Cashdispenser
BANKS BUSINESS
BANKS BUSINESS
RAIS
ING
DEPOSITS
LOANS&M
ISC.SERVICES
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Financial Technology Infrastructure
Data Center to host servers for:
CBS ATM/Financial Switch
Internet Banking
DW/DM/CRM/MIS etc.
Back-office Application E-mail Servers, Internet Server,
Enterprise-wide Network & NetworkingEquipment
Security SystemsSystems at Branches/RO/ZO/CO Depts.
Supporting Systems
Disaster Recovery Site & Business Continuity
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Structured Financial Messaging System
Branch-1
Bank-1 Gateway Bank-2 Gateway Bank-n Gateway
Branch-2 Branch-n Branch-1 Branch-2 Branch-n Branch-1 Branch-2 Branch-n
Central Server at
IDRBT
..... ......
..
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SBI HISTORY
State Bank of India (SBI) is the largest banking and financialservices company in India by revenue and total assets.
Its a state-owned corporation with its headquartersin Mumbai, Maharashtra.
SBI provides a range of banking products through its vastnetwork of branches in India and overseas, including productsaimed at non-resident Indians (NRIs).
The State Bank Group, with over 16,000 branches, has thelargest banking branch network in India. SBI has 14 Local HeadOffices and 57 Zonal Offices that are located at importantcities throughout the country. It also has around 130 branchesoverseas.
http://en.wikipedia.org/wiki/Financial_servicehttp://en.wikipedia.org/wiki/Financial_servicehttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Non-resident_Indianhttp://en.wikipedia.org/wiki/Non-resident_Indianhttp://en.wikipedia.org/wiki/Non-resident_Indianhttp://en.wikipedia.org/wiki/Non-resident_Indianhttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Financial_servicehttp://en.wikipedia.org/wiki/Financial_service7/29/2019 Banking Information System
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ELITEX-2008 8
Changes brought in IT
Late 1990sMore than 8000 branches either on
decentralized systems or manually operated,
Main Frame / Mini Computers used at CO/LHO/ZO
for backend operations. Internet Banking Facility for individuals.
All ATMs of State Bank Group networked.
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ELITEX-2008 9
Changes brought in IT
2001 - KMPG appointed consultant for preparing IT
Plan for the Bank. Core Banking proposed, FNS,
CS, COMLINK selected
2002All branches computerized but ondecentralized systems,
Core Banking initiative started
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ELITEX-2008 10
Changes brought in IT
2008- more than 6500 branches (95% of business)on Core Banking Solution (CBS),
Internet Banking facility for Corporate customers
More Interfaces developed with eCommerce &other sites through alternate channels like ATM &Online Banking
All Foreign Offices on Centralized Solution
BPR initiative to realign business process withchanges due to IT
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ELITEX-2008 11
Changes brought in IT
Large Network as backbone for connectivity across
the country
Multiple Service Providers for providing the links
BSNL, MTNL, Reliance, Tata & Railtel Multiple Technologies to support the networking
infrastructureLeased lines, Dial-up, CDMA &
VSATs
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ELITEX-2008 12
TBA - Distributed System Components
Banking
Application
OS, Database
Internet-Banking
ATM
Diskless
nodesLAN
Branches
System AdministratorUser Control Officer
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ELITEX-2008 13
CBS - Core Banking System ComponentsDatacenter
Network Administrators
Core-Banking Application
OS, Database
Internet-Banking
ATM
Desktops,
Branch
Servers
WAN, Internet
Branches
Application Developers
System AdministratorsBranch User/Admins
Alternative
Channels
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ELITEX-2008 14
Organization structure of IT
DMD(IT)
GM (IT) & CISO
DMD (I&A)
CGM (IT)
GM (ITSS)
DGM (ITSS)
AGM (ITSS)
GM (I&A)
CIOCGM (I&A)
Application Owners
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ELITEX-2008 15
Organizational Structure of IS
AGM (ISD)
Information Security Officers
DMD(IT)
GM (IT) & CISO
FUNCTIONS
Consulting Monitoring Compliance
2003 - Information Security consultant appointed for InformationSecurity Initiation
2004 - Information Security Department setup headed by
GM (IT) & CISO and supported by CISA qualified ISOs
ISSSC setup by the Board
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ELITEX-2008 16
Objective of IS
To provide banks business processes with reliable
information systems by systematically assessing,
communicating and mitigating risks, therebyincreasing customers trust on the bank and
achieving world class standards in information
security.
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SERVICES PROVIDED BY SBI INTERNET
BANKING
E-Ticketing
SBI E-Tax
Bill Payment
RTGS/NEFT
E-Payment
Fund Transfer
Third Party Transfer
Demand Draft
Cheque Book Request
Account Opening Request Account Statement
Transaction Enquiry
Demat Account Statement
Donation
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ELECTRONIC FUND TRANSFER
The Funds Transfer facility enables you to transferfunds within your accounts in the same branch orother branches of SBI. You can transfer aggregatingRs.1 lakh per day to own accounts in the same branch
and other branches The Funds Transfer facility also enables to transfer
money to trusted third parties who are SBI accountholders.
For transferring money into other banks RTGS & NEFT
is used. For a fund transfer of Rs. 2 lakhs & above RTGS(Real Time Gross Settlement) is used.
In NEFT (National Electronics Fund Transfer) there is nominimum limit for fund transfer.
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ELECTRONIC FUND TRANSFER
RTGS & NEFT system of fund transfer facilitates moneytransfer between SBI account & accounts in other banks& vice versa in India
RTGS- this transaction happens on real time & gross
settlement basis. NEFT- In this transaction happens in batches
1.) 6 settlements on weekdays - at 09:00, 11:00, 12:00,13:00, 15:00 and 17:00 hrs.
2.) 3 settlements on Saturdays - at 09:00, 11:00 and 12:00hrs.
SWIFT (Society for Worldwide Interbank FinancialTelecommunication) is a means of secure internationalfinancial messaging.
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MAJOR CUSTOMERS OF INSTANT
FUND TRANSFER IN SBI Food Corporation of India Instantaneous transfer of funds, at 3000+ branches eliminatingdelays & reconciliation issues
ONGC
Online vendor payments across the country enabled by SBI
IOC Same day credit to IOC for Dealer transactions across the countryeither online or through sweep facility
Ministry of Agriculture
All Pay and Account offices under the Ministry are making Vendorpayments electronically through our CMP. This is shortly beingextended to Department of Revenue (MoF) & Ministry of ExternalAffairs.
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PAYMENTS OF SOCIAL SECURITY
BENEFITS SBI is working with the Govt. of Andhra Pradesh to enable payment of Social
Security Pension and payment of stipends under the National Rural
Employment Guarantee Scheme (NREGS)
Over 1 mm No Frills savings account have been/are being opened in the
names of the beneficiaries, into which the Govt. benefits are paid
SBI Tiny Cards based on smart Card technology provided to the beneficiaries
who can withdraw money/deposit money by simply swiping their SBI Tiny
Cards on a hand-held device with the Business Correspondent/Business
Facilitator in their village. SBI tied up with INDIA POST for this purpose
SBI is also working closely with Govt. of Rajasthan in the Bhamashah scheme
for upliftment of families below poverty line SBI Tiny Card to enable
Payment of insurance premium
Payment of SIP Mutual Funds
Recharging of Mobile phones
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RECEIPTS
Online Tax Accounting System (OLTAS) / Electronic Accounting
System in Excise and Service Tax (EASIEST)
Online Direct Taxes Collection of Govt. of India (Income Tax /
Corporation Tax etc)
Banks are reporting transactions through electronic strings to RBI for funds settlement and to the website of TIN of CBDT for update of
Assesse data
Data extracted at SBIs state-of-the-art data centre at Navi Mumbai
the same day and processed funds settled on the next day itself
Enabling Govt. to view their collection of Direct Taxes throughout the
country on a daily basis
Central Excise & Service Tax Collection is done similarly
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RECEIPTS
E- FREIGHT E-TICKETING
New facility started with Indian Railways Railway ticketing through the banks
Internet banking process
Facility of e-payment of freights to
corporates
Booking of railway tickets through
internet banking.
Nearly 100 corporates have been coveredin this system.
Nearly 20% of tickets sold on only westernrailway is through e-ticketing or e- rail.
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RECEIPTS
Cyber Treasury Centralised Settlement andReconciliation of PPF
Technology partnerships with
various State Governments
PPF transactions
takes place at all 4500 branches
hits the Banks centralised system
Simultaneously
Large number of small value taxes
commercial tax, VAT, CST, etc.
remitted by public through internet
Timely settlement of funds with
RBI
Remitters get a cyber receipt MIS to the Govt. to enable Govt. to
monitor & better manage its
liquidityProject running in 6 states, MP,
Haryana, Chhattisgarh, Gujarat,
Rajasthan
Electronic MIS is provided to the
State Governments
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ADVANTAGES TO CUSTOMERS
It is convenient.
It isn't bound by operational timings.
There are no geographical barriers.
Services can be offered at a miniscule cost. Check your transactions at any time of the day,
and as many times as you want to.
Getting quarterly statements from the bank,
transferring funds to outstation, and other suchactivities can be done free of charge throughonline banking.
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ADVANTAGES TO BANK
Very low setup cost.
Capability to cater to a very large customer
base.
Saves a lot of operational costs. Adds to the
baseline.
Banks san offer a lot of personalized services
to their customers.
Reduction of burden on branch banking.
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ADVANTAGES DISADVANTAGES
Check account balances and track
recent account activity
Need an account with an Internet
Service Provider (ISP)
Transfer money between accounts Security concerns, like hackers
accessing your bank accounts
Authorize electronic bill payments Original setup for bill paying time is
time-consuming but will ultimately be
a time-saver
Issue stop payment requests Switching banks can be more
cumbersome online than in person
Apply for auto, mortgage, home equity,
student, or personal loans
Must have basic computer skills and
Internet knowledge
Receive investment product and
service information
Must be comfortable using a
computer
ADVANTAGES & DISADVANTAGES OF E-BANKING
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Technology Vision of the RBI
Centralised DatabaseManagement System
Enterprise KnowledgeManagement System
Integrated AccountingSystem Integrated GovernmentAccounting System Currency OperationsSystem
Desk Top Decision Making Capability
Desk Top Analytical Capability
Desk Top Transactional Capability
Securities Settlement
System
Integrated Establishment
System
Offsite Supervisory
Systems
Integrated Forex
Management System
Human Resource
Information System
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The pre-requisites for
TechnologyPlanning for disasters
Increased operational risk
Business Continuity Planning
Business Process Re-engineering
Human Resource Empowerment
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DISASTER RECOVERY SYSTEM
Its a replica of CDC(central database collection)
Many banks have 100% replicated remote DRsites,automated protocols and processes anddedicated trained staff.
Disaster management involves:
(i) pre-disaster planning, preparedness,monitoring including relief managementcapability,
(ii) prediction and early warning, and
(iii) damage assessment and relief management.
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DRS
Experts recommend a three-pronged DR strategy for any
IT driven organization:
(i) prevention, which can totally avoid or minimize
occurrence of disasters,(ii) anticipation, in which likely disaster scenarios can be
identified and preventive action taken
(iii) mitigation in which corrective steps can be initiatedat the right time to minimize the impact of disasters
sas er ecovery
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sas er ecoveryManagement-benifits
minimizing interruptions in operations;resuming critical operations within a specifiedtime after a disaster;
minimizing financial loss;maintaining a positive public image of theorganization
Bank can provide continuous service to thecustomers,
Without seriously affecting the back end
operations of the bank
CORPORATE BANKING:-
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CORPORATE BANKING:
The Online SBI corporate banking application provides features to administerand manage corporate accounts online. The corporate module provides
roles such as Regulator, Admin, Up loader, Transaction Maker, Authorizer,and Auditor. These roles have access to the following functions:
Manage users, define rights and transaction rules on corporate accounts
Access accounts in several branches with a single sign-on mechanism
Upload files to make bulk transactions to third parties, supplier, vendor andtax collection authorities.
Use online transactional features such as fund transfer to own accounts,third party payments, and draft issues
Make bill payments over the Internet.
Authorize, modify, reschedule and cancel transactions, based on rightsassigned to the user
Generate account statement
Enquire on transaction details or current balance
l
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NSDL Site -Pay Tax Online
S l t Ch ll T
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Select Challan Type
E t Ch ll D t il
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Enter Challan Details
C fi A D il
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Confirm Assesses Details
L t O li SBI
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Logon to OnlineSBI
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How ATMs Work?
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How ATMs Work?cont.
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New Technologies
- Biometrics
- Cheque / cash acceptation
- Barcode scanning
- Ondemand printing of item value
- Display additional media such as phone card
- Coordination of ATMs with mobile phone
- Customer specific advertising-
Weaknesses:-
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Weaknesses:
Lack of awareness among the existing customers
regarding internet banking Obsolesce of technology take place very soon specially
in terms of security on internet.
Procedure for applying for id and password for usingservices related to internet banking takes time.
Lack of knowledge is found regarding internet bankingin employees of SBI
Implementation of newer technology is little bitcomplicated
Employees needs training to obtain knowledgeregarding I-banking
Challenges:-
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Challenges:
Maintaining Business Edge over competitors in the
context of sameness in IT infrastructure
Multiple vendor support is necessary for working of
highly complex technology
Maintaining secured IT infrastructure for business
operations
Alternative must be there in case of failure of
system
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ELITEX-2008 44
Security Awareness
User awareness through multiple channels like intranet,
training etc.
e-Learning package on information security distributed
across Bank
Specialized IS awareness sessions for controllers
Dedicated IS Security sessions during training.
Observing Computer Security Day every year across
the organization.
Write ups on Information Security in the in-housemagazines
Exchange of information on threats and vulnerabilities at
appropriate forums.
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ELITEX-2008 45
Improving our IS Security
Benchmarking SBI initiatives against International
Best Practices
E&Y benchmarking initiative in 2006
RBI requirement under section 35
External audit of IS initiatives
BS27001 certification of CDC-DRC, ATM & INB
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ELITEX-2008 46
Challenges ahead
Retaining Bank's lead Position
Maintaining Business Edge over competitors in the
context of sameness in IT infrastructure
Assured Availability Financially critical systems increasingly depend on IT
Delivery channels- no margin for downtime
Infrastructure derisking
Tie-up with multiple vendors for spreading risks due toinfrastructure failures and obsolescence
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ELITEX-2008 47
Challenges ahead
Managing IS Security
Information Security dependency on vendor inputs
Complex networked environment leading to lack of
Know Your - Employee , Systems & Procedures , Vendors
Maintaining Confidentiality & Privacy of Data while instorage, transmission & processing.
Providing DRP & BCP in a complex technology
infrastructure supported by multiple vendors
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Issues in ImplementationLess than 10% of failures are due to technical snags most are due topoor management and implementation
Resistance to change
Overlooking processreengineering
Project managementDedicated project teams
Change management
Policies
People Skills & Training
Basic Infrastructure
telecom,power
Security
Privacy & confidentiality
Legal and regulatory issues
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Many Benefits of Technology
Increased operational efficiency, profitability &
productivity
Superior customer service
Multi-channel, real-time transaction processing
Better cross-selling ability
Improved management and accountability
Efficient NPA and risk management
Minimal transaction costs
Improved financial analyses capabilities
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FINANCIAL MANAGEMENT
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INPUTS
PAYMENTS
RECEIPTS
DATA FROM STOCK EXCHANGES OF SHARE
PRICES
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PROCESS
APPLICATIONS
ACCOUNTING
QUERY
DECISION ANALYSIS
CONTROL
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OUTPUTS
REPORTS
STATUTORY COMPLIANCE
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USES
INFORMATION UPDATES
OPERATION UPDATES
DECISION ANALYSIS
ACTION UPDATE
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