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2.2.4 Core Banking System

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49 views15 pages

2.2.4 Core Banking System

Uploaded by

Yash Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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INSTITUTE - USB

DEPARTMENT - BBA
Subject Name- Banking & Insurance
Subject Code- 22BAT-324
Faculty Name – Mr. Vivek Sharma (E13500)

DISCOVER . LEARN . EMPOWER


Core Banking System
Core Banking
System
Course Objective
1. To create awareness among the students regarding banking
and insurance concepts for better careers in this field
2. To apply the practical knowledge of Banking and
Insurance in a dynamic business environment.
Course Outcome
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To appraise the changing scenario of Remember
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banking practices, products and
services

2
Table of Contents
S No. Contents Slide No.
1 Meaning and significance of Core Banking 4-5
System (CBS)
2 Significance of CBS 6

3 Key Modules of CBS 7

4 Popular CBS 8-10

5 Benefits and Key Challenges 11-13


3
1. Meaning of Core Banking System (CBS)

• Core banking system as a back-end system that processes daily


banking transactions and posts updates to accounts and other financial
records. Core banking systems typically include deposit, loan, and
credit processing capabilities, with interfaces to general ledger systems
and reporting tools.
• The software that banks employ to oversee their most important
operations, including customer accounts, transactions, and risk
management, is known as a core banking system. It is a bank's central
nervous system and is necessary to keep regulations compliant and
deliver a flawless customer experience (CX).
4
Core banking systems are aimed at empowering existing and
probable customers to have a greater freedom of their account
transactions.
With technological evolutions, transactions are now safer,
faster, and less cumbersome. Core banking systems can be
either on-premises. On-premises systems are installed and
maintained on the bank's own servers, while cloud-based
systems are hosted by a third-party provider.
2. Significance of CBS
• Core banking consistently ensures a significant reduction in
operating costs and a lower need for labor for execution. It
also permits customers to take greater responsibility.
• Core banking systems are made more efficient and user-
friendly by software application-based platforms.
• Core banking systems have many advantages, including
helping banks access new markets and simplifying and
improving client convenience while keeping up with rapidly
changing market conditions.
6
3. Key Modules of CBS
 Accounting. This module tracks all a bank's financial transactions, including
deposits, withdrawals, loans and payments.
 Customer relationship management (CRM). The CRM module helps banks
manage their relationships with customers by storing customer data, tracking
interactions and generating reports.
 Risk management. This module helps banks identify and mitigate risks, such as
fraud and credit risk.
 Operations. This module supports day-to-day operations, such as processing
transactions and managing accounts.
 Reporting. This module generates reports that help banks track performance and
make decisions.

7
Popular CBS Available

Image Source:
https://image.slidesharecdn.com/technologyinbanksslideshare-200626221538/85/Technology-in-banks-4-320.jpg
8
There are many different core banking systems available, and the best choice for a
particular bank depends on its size, needs, and budget. Some of the most popular
core banking systems are the following:

• Finacle. This system is developed by Infosys and is used by over 1 billion


customers in over 100 countries. Finacle solutions address the core banking,
lending, digital engagement, payments, cash management, wealth management,
treasury, analytics, AI and blockchain requirements of financial institutions
• Finacle solutions support various modern and traditional customer engagement
channels, enterprise capabilities, line of business components, and business
segments, such as Retail, Wealth, Islamic, Business, and Corporate banking.
• Finacle’s componentized structure allows banks to deploy and upgrade solutions
flexibly as per their business priorities. Our comprehensive and versatile suite
powers truly digital transformation for financial institutions of all types –
traditional or emerging, global or regional, omnichannel or digital-only.

9
Oracle Banking Cloud Services. This system is developed by Oracle
and is used by over 130 banks in over 70 countries.
• TCS BaNCS provides your bank with the products and technology to
meet the opportunities of tomorrow. TCS BaNCS’ open ecosystem
enables your bank to do business with anyone, and its rich set of APIs
allows anyone to do business with your bank.
• Built using cloud-native microservices for maximum flexibility and
ease of deployment, the solutions enable faster time to market, faster
compliance with new regulations, and an enhanced user experience.
Key Benefits of CBS

 Improved efficiency. Core banking systems can help banks


automate many of their manual processes.
 Reduced risk. Core banking systems can help banks identify and
mitigate risks, such as fraud and credit risk.
 Enhanced CX. Core banking systems can help banks provide more
seamless CX by making it easier for customers to manage their
accounts and transactions.
 Increased compliance. Core banking systems can help banks to
fulfill all the regulatory compliances by providing a central
repository for all of their financial data.
Key Challenges of CBS

 Cost. Core banking systems can be expensive to purchase and


implement.
 Complexity. Core banking systems are complex pieces of software,
and it can be difficult to implement them effectively.
 Integration. Core banking systems need to be integrated with other
systems, such as the bank's CRM system and its risk management
system. This can be a complex and time-consuming process.
Summary
• Core banking systems reduce a bank's downtime by centralizing
and automating operations, ensuring seamless, real-time
transaction processing.

• They enhance system reliability and efficiency, minimize


maintenance disruptions, and provide consistent service across all
branches. This leads to improved customer satisfaction and
operational efficiency, reducing the likelihood of service outages.

13
REFERENCES
• Reference Books
1. J.N. Jain & R.K. Jain: Modern Banking and Insurance, Regal Publications
2. A. Ranga Reddy, C. Rangarajan: Rural Banking and Overdues Management,
Mittal Publication
• Reference Website
•https://www.techtarget.com/whatis/definition/core-banking-system
•https://www.gartner.com/en/information-technology/glossary/core-banking-system
s#:~:text=Gartner%20defines%20a%20core%20banking,ledger%20systems%20an
d%20reporting%20tools
. 14
THANK YOU

For any queries


Kindly Email: vivek.e13500@cumail.in

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