Core Banking solution -

CBS

V. Rajendran

Advocate and Cyber Law Consultant

URL: venkrajen.in

venkrajen@yahoo.com, rajcyberlaw@gmail.com

+91-44-22473849; +91-9444073849

Evolution of Banking in India

• Pre Nationalisation era

• 1969 – First phase

• 1980 – Second phase

• Early 90’s – Globalisation, Privatisation,

Liberatlisation and Computerisation

• Entry of many private sector banks

• Foreign banks

• Competition – Pvt Sector Banks, PSBs, Foreign

Banks, RRBs, Co-op Sector

Computerisation in Banking

• Started with mechanisation- Punch Cards

• Data Entry jobs – Data Consolidation

• ALPMs – First phase of computerisation

– Stand-alone systems

– Every PC was a database

– unconnected PCs

– No LAN, No SWS, No C/S Architecture

– Easy, manageable, data privacy, secure

– Multiple data and data integrity issues

Mechanisation of processes

• Computerisation in banking was earlier

considered as mechanisation of processes and

later became a process re-engineering and

analysis of steps involved -

• Manual forms and computerised data entry

screens – Differences

• Data Storage – Manual and electronic

• Data Retrieval – Manual and electronic

• Process in a computer vis a vis manual

Computerisation in Banking - contd

Second phase – TBA (also called TBC or TBM)

• Every branch a data centre

• Database – Distributed database

• LAN – Connectivity – client Server

• Single Window Concept

• A Server connected to Nodes, Workstations, PCs,

Dumb terminals, diskless nodes, front-end

processors, minimum front-end jobs

Second Phase – TBA contd

• LAN Architecture

• LAN cabling - connectivity

• Topology – different types of topology

• Network – connectivity and security issues

• Data handling – Branch data

• Advantages: Security, better controls, Ease of

Use, Handling huge data at the branch level,

report generation, print-outs, Single Window

Computerisation in Banking - Terminology

• Mechanisation and computerisation

• Data and Information – Definition and usage

• Data Entry, Data Consolidation

• LAN and connectivity issues

• LAN and Network medium – cables used –

• Topology in LAN – Its use in banks

• Meaning and use of Single Window Concept

Second Phase – TBA contd

Constraints – Limitations – disadvantages

• Distributed data base

• Data Integrity and related issues

• Patch Management, Version Control

• Centralised data consolidation at HO/CO

• Service thro Electronic Delivery Channels like ATMs,

Internet Banking, Cards and Mobile Banking

• Permission and access through ABB or AWB or WAN

Computerisation in Banking - contd

Third phase – CBS

• Basically two significant ingredients

1. Centralised data centre

2. Connectivity and access from any branch

• Other features and advantages

• Electronic Delivery Channels: Meaning and

significance – Effective us through CBS

• Other electronic products: RTGS, NEFT, Funds,

HR, ERP-like environment

Core Banking Solution

• Essentials: 1. Centralised Data

– Data Centre, Primary, Secondary, DRS – DRC

– Data Warehouse, Data Mining

– Data base Server: DB, Appln servers

– Access from anywhere, any time

– Database Controls

– O/s controls

– Application controls

– Front-end processors, controls and validations

Core Banking Solution

• CBS Essentials: 2. network

• Connectivity: WAN

• Terrestrial lines: Wired - Cables, OFC

• Non Terrestrial: Wireless – Microwave Tower,

Radio, VSATs etc

• Network, bandwidth, constraints and features

• Network gadget: Modems, routers, switches etc

App Servers like CBS, ATMs, Firewall, webserver,

emails etc

Data - RDBMS

O/s

Branches, Users, Offices gettingConnected to the CBS

Typically, CBS is a layered approach

User

• Branches, users connect to the data centre through the net like CBS branchg, ATM connectivity, Internet Banking etc

• Sometimes from intranet ie inside the bank network and sometime from Internet ie user’s own system eg Internet Banking, Mobile etc

App Server

• Data flows through the telecom medium (WAN, cables, wireless, VSAT etc)

• Data reaches the app server eg CBS Application, ATM Switch etc

DB server and O/s

• Data reaches the database (mostly Oracle) ie the database server

• The database server sits on the O/s, normally a Unix server

CBS Design

• Depending upon the design in the particular

bank and the architecture planned, there are

other servers like a Load Balancers, CBS

application servers, Internet and web-server,

Firewalls, etc

• DMZ – Demilitarised Zone that protects the

critical servers from malware attacks and

ensures Intrusion Detection and Prevention and

does Unified Threat Management, Content

Filtering – Outgoing and incoming traffic

CBS – IT Department functions

• I T Dept has a crucial role at the Data Centre

• Security Admin duties on security policy, its

management, implementation, guidance to

others on security and related issues

• System admin duties on user creation, user

management, db admin etc

• Network admin duties like network issues

• Repository and library – e-library, version

control and related issues

Core Banking – some basics

• A Centralised Banking Application software

• Two fundamentals and pre-requisites of CBS:

– 1. Centralised database AND 2. connectivity

• No branch concept ie banking from any branch

and hence customer of the bank

• Consists of various components of banking

• ERP in banking –

• Mechanisation of existing process AND

introduction of new channels like ATMs made easy

Network architecture

• LAN in any branch and in admin offices

• WAN – global connectivity

• Sometimes VLANs wherever required

– Essentials of VLANs, features, necessity

– Security concerns in VLANs

– Data and information communication across network

• Data handling at the core centre and movement

of information in Internet and Intranet

Data Centres

• Data at the core centre

• Primary Data Centre

– Its location, features, criticality

• Secondary data centre

– seamless backup, features and capability, location

• Disaster Recovery Centre – DRS

– Where to locate, features, limited functionality,

seamless backup or with some limitations?

Courtesy: Internet – Finacle Screen

CBS – Screen (Courtesy: Finacle)

Data Entry Screens in CBS

Finacle – Data Entry Screen

CBS – Front end screen

CBS –Screen shots Specimen

Sample Screens - CBS

CBS –Screen shots Specimen

CBS –Screen shots Specimen

Questions ???

Thank you…..

V. RajendranURL : venkrajen.in

venkrajen@yahoo.com

rajcyberlaw@gmail.com

+91-44-22473849; +91-9444073849