Core Banking Solution (CBS) - Important Key Points

CORE BANKING SOLUTION (CBS) - IMPORTANT KEY POINTS

Essential for All Upcoming Bank Exams

Introduction: 

Centralized Banking Solution or Core Banking Solutions (CBS) is the method which is completed in the centralized ambiance that is under which the information relating to the customers’ account (i.e. profession income, financial dealings etc.) is stored in the Central Server of the bank (that is available to all the networked branches) instead of the branch server. 

Confiding upon the needs and size of a bank it could be for the all the operations or for limited operations. This task is carried through an advance software by making use of the services provided by specialized agencies. 

Due to its convenience some banks in India in recent years have taken steps to implement the CBS with a view to build relationship with the customer based on the information captured and offering to the customer, the customized financial products according to their need. 

Essential requirement of CBS: 

Disaster recovery site (DRS) – 

It is done to avoid disruption in the business activities of CBS branches due to central system or network failure to ensure non-stop functioning of branches and on line delivery channels integrated with CBS, to act as a backup for providing a reliable and continuous processing environment. 

Software – 

• It is to comprise that branch functional modules, delivery channels needs like telebanking, ATMs, interface to integrate with RTGS, NDS, internet banking etc. 
• Creation of Primary Data Center – 
• It houses the central server for online transaction. Central data base is used for customer centric delivery channel services integrated with CBS. It is manned round the clock to offer 24*7 service to the customer. 

Business process re-engineering – 

• It done with a view to help the bank in realigning existing business processes in tune with the benefits provided by the new technology platform, to help the bank in taking advantage of the best business practices available in the technology platform to provide more efficient services. 
• Networking – 
• Leased lines of WAN to be used as primary communication channel and ISDN link as back up. 

Advantages: 

The CBS process is advantageous both the customers and the banks in the following manner – 

Banks – 

• Better MIS and reporting to external agencies such as Govt., RBI etc. 
• Standardization of process within the bank. 
• Availability of accurate date. 
• Increases business volume with better asset liabilities management and risk management. 
• Better customer service leading o relation of customer and increased customer traffic. 
• Better use of available infrastructure. 

Customer – 

• Lower incidence of errors. Hence accuracy in transactions. 
• Transaction of business from any branch, ATM that offers any time anywhere banking facility. Better funds management due to immediate availability of funds.