Choose software keeping users in mind
the centre of a banks IT infrastructure lies a centralised core banking
system. CIOs should put this in place as quickly as possible for efficient and
personalised customer service, believes K Raghuraman, General Manager
of Central Bank.
It is essential for banks to have a customer-centric focus
to improve profitability and broaden their customer base. Because the ability
to make correct business decisions depends on the instant availability of information,
it is essential for financial institutions to store data in a central hub that
facilitates data retrieval and analysis, both of which are essential in conducting
The core banking concept is aimed at making business easier and facilitating
customer transactions. It involves storing data in one central server, irrespective
of the location of a particular branch.
Core banking is beneficial for customers as well as the bank. It increases the
efficacy of delivery channels, and provides facilities such as ATMs, Internet
banking, tele-banking and mobile banking. Its important for bank CIOs
to pay attention to setting up and running a reliable core banking infrastructure.
Core banking helps maintain a customer
database that provides essential business intelligence in terms of knowledge
of customer preferences, their banking habits, and other relevant customer
information that assists in providing better service
THE CASE FOR CORE BANKING
The deployment of core banking in a financial organisation helps maintain a
customer database that provides essential business intelligence in terms of
knowledge of customer preferences, their banking habits, and other relevant
information that assists in providing better service to customers.
In addition, core banking helps bankers make important changes to various operations
and workflow processes in all the branches of a bank. The changes made at the
data centre automatically cause data in all the other branches to be changed,
saving valuable manpower and time. Besides, employees at all branches can now
access data simultaneously.
CHOOSING THE SOFTWARE
There are several things to be considered while choosing a core banking solution.
It should satisfy the scope of business objectives, be robust and upgradeable
for future requirements, and provide easy retrieval of data. The vendor should
also offer the required support services.
When a bank migrates from a branch-based solution to a centralised one, the
software it deploys must be chosen keeping in mind the primary users. Therefore,
it must be user-friendly and should suit the type of business a particular branch
Two other factors that affect the choice of a solution are the size of the business
and transaction traffic.
CHECKS AND BALANCES
number of checks and balances needs to be enforced to ensure that the core banking
solution is an ongoing process. Important factors relating to the maintenance
of a core banking solution are security and audit trails. People must be appointed
to ensure that all functions are performed according to required procedures.
Checks and counterchecks should be done simultaneously. The security process
is aimed at ensuring that the core banking system employed is insulated from
all external and internal threats, whether technical or not.
MIGRATING TO CORE BANKING
are several factors to be looked at while mapping the migration path from an
existing platform to a new one. Apart from putting in place a Business Continuity
Plan (BCP), the organisation deploying core banking should endeavour to bring
about a change in the attitude of employees, improve their skill sets, and provide
them with training for using the new software.
STEPS FOR DEPLOYING CORE BANKING
While deploying a core banking solution, the following points should be remembered:
- The solution deployed should be robust and adaptable.
It must suit the business focus of the bank.
- The software should be able to facilitate the quick
retrieval of information.
- After setting up data centres, a unified command
at the highest level should be created. It is essential to have total commitment,
from the top management to the implementing staff below.
- The components of core bankingsuch as networking
and routingmust be employed in an integrated manner, and a business
intelligence solution must essentially be included in the solution. This will
propel the bank to perform better in terms of productivity and retention of
customers. It is also important to have a disaster recovery site, and short-term
and long-term BCP.
The processes involved in a centralised banking solution are different from
the processes involved in total branch automation. Therefore, when a bank decides
to deploy a core banking solution, its business processes and transaction methodology
undergo a significant transformation.
The CIO thus needs to choose the requisite software, and train the staff adequately
to enable them to handle the software efficiently.
As told to Newly Paul