“Choose software keeping users in mind”

At the centre of a bank’s 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 business profitably.

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. It’s important for bank CIOs to pay attention to setting up and running a reliable core banking infrastructure.

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 handles.

Two other factors that affect the choice of a solution are the size of the business and transaction traffic.

CHECKS AND BALANCES

A 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

There 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 banking—such as networking and routing—must 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