Function of IT

Department in
CBS Environment.
ITT Project Report

 Submitted by : -
 Suyash Raju Zagade
 Registration No. – WRO0709298
 Branch Name – Vasai Branch of WIRC
 Batch Timing – 2:30 p.m. to 8:30 p.m.
 Batch Start Date – 07/01/2022
 Batch End Date – 23/01/2022
ITT Project Report Function of IT Department in CBS Environment.

 TABLE OF CONTENTS

 REASONS FOR SELECTION OF THE TOPIC:...................................2

 INTRODUCTION TO THE TOPIC:..................................................4

CBS ARCHITECTURE........................................................................7

 TECHNOLOGY BEHIND CORE BANKING SOLUTIONS:...................8

 THE VARIOUS COMPONENTS OF A CORE BANKING

ENVIRONMENT:..............................................................................9

 FUNCTIONS OF IT DEPARTMENT IN CBS ENVIRONMENT:..........11

CBS WORKING..............................................................................18

 KEY MODULES OF CBS:.............................................................19

 COMPONENTS AND ARCHITECTURE OF CBS:............................23

 BIBLIOGRAPHY.........................................................................33

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ITT Project Report Function of IT Department in CBS Environment.

 REASONS FOR SELECTION OF THE TOPIC:

 A Topic I am curious about:

My topic is about Functions of IT Department in Core Banking

Solution (CBS) which is the networking of various bank branches through
a robust IT infrastructure. It allows the customers to operate their bank
accounts and avail themselves of the banking services with a centralized
network. In other words, with CBS, their accessibility is not limited to
just their bank branch, but the bank as a whole. And further I want to
learn more about its importance, technology behind CBS, etc.

 A Topic I’m interested in:

I find my topic so much interesting as there are many points to

learn about the Core Banking System in IT Department. It is interesting to
learn about the technologies used behind the CBS and how people work with
these technologies to work on CBS.

 A Topic That is Understandable:

This topic is manageable as it is very interesting and once we read

about this topic we can understand what the topic is exactly about and is
also easy to understand. And when we read about this topic our interest
automatically grows about it and we try to understand more about this
topic.

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ITT Project Report Function of IT Department in CBS Environment.

 A Topic that is Challenging:

It is a challenging topic as we can learn so many concepts about

Core Banking Systems in IT Department. Although it is easy to
understand but it has a great impact on Banks and because of CBS its servers
are on all 24 hours on all days, banking can be done any time and also
from anywhere.

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ITT Project Report Function of IT Department in CBS Environment.

 INTRODUCTION TO THE TOPIC:

O
ver the years, the banking operations have been automized to a
large extent and wide range of banking softwares have been
developed for accounting of transactions and core banking
operations. Bank software is becoming more sophisticated all the time. As new
accounting methods develop and more people bank online, private banking
software is being developed to streamline the processes.

What is CBS?

The core banking system is the set of basic software components that
manage the services provided by a bank to its customers through its branches
(branch network). The bank's customers can make their transactions from any
branch, ATM, Service Outlets, Internet, Phone at their disposal. The CBS is
based on Service Oriented Architecture (SOA). It helps banks to reduce risk
that can result from manual data entry and out of date information. It also
helps banks to improve Service Delivery quality and time to its customer.
The software is accessed from different branches of bank via
communication lines like telephones, satellite, internet etc. Core Banking
System [CBS] works on a concept of Centralized Database and Processing.
Transactions take place at various geographical locations which get recorded
and processed at a Centralized Server. Updation of Database is on Real Time
Basis. Due to the Centralization of Transaction Processing, issue of Out of Date
Information is eliminated. All the users connected to CBS will be able to get
upto date information. CBS also enhances quality of Reporting and strengthens
Access Control.
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ITT Project Report Function of IT Department in CBS Environment.

Centralized Banking Solution / Core Banking Solution

Under CBS data is stored in centralized servers at Data Centre. This

effectively means that all operations at the connected branches, back offices
are carried out through servers at Data Centre including transactions through
other delivery channels like ATMs, Internet Banking, Phone Banking. Under
CBS, the branches, back offices are defined as SOL (i.e. Service Outlets) where
each SOL functions as a service window. The CBS is capable of processing any
transaction from any branch location connected to CBS. It can be equated with
single window operations at airline counters or railway reservation counters
wherein all the services can be obtained at one place.
Hence, under CBS customer is now a customer of the bank and not
merely a customer of a branch of the Bank. This has facilitated Any-where,
Anytime Banking convenience for the customer. From Bank’s perspective,
control over the application and processes has been entrusted at Data Center
Level. In addition to it CBS also makes available effective MIS on real-time
basis. It enables generation of all periodical returns centrally.
Some CBS software are given below. These are only illustrative and not
exhaustive.
1. Finacle: It is a core banking software suite developed by Infosys that
provides universal banking functionality covering all modules for banks
covering all banking services.
2. FinnOne: This is a web-based global banking product designed to
support banks and financial solution companies in dealing with assets,
liabilities,
core financial accounting and customer service.

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3. Flexcube: It is an automated, comprehensive, integrated, interoperable,

and modular solution developed by Oracle Financial Services that
enables banks to manage evolving customer expectations.
4. BaNCS: It is a customer-centric business model which offers simplified
operations comprising loans, deposits, wealth management, digital
channels and risk and compliance components.
5. bankMate: It is a full-scale banking solution which is scalable and
integrated e-banking system that meets the deployment requirements
in traditional and non-traditional banking environments. It enables
communication through any touch point to provide full access to provide
complete range of banking services with anytime, anywhere paradigm.

Further, there are many CBS software developed by vendors which are used by
smaller and co-operative banks. Some of the banks have also developed in-
house CBS software. However, the trend is for using high-end CBS developed
by vendors depending on cost-benefit analysis and needs.
Core Banking Solution has become a mandatory requirement to provide a
range of services demanded by customers and the competitive banking
environment. This requires that most of bank’s branches access applications
from centralized data centres. CBS for a bank, functions not only as a heart
(circulatory system) but also as a brain (nervous system). All transactions flow
through these core systems, which, at an absolute minimum, must remain
running and responsive during business hours. These systems are usually
running 24x7 to support Internet banking, global operations, and real time
transactions via ATM, Internet, mobile banking, etc.

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CBS ARCHITECTURE

Central
Server

Branch Branch Branch

Router Router Router

Node Node Node

Node Node Node

Node Node Node

 TECHNOLOGY BEHIND CORE BANKING SOLUTIONS:

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As already observed Core Banking describes the banking services

provided by a group of networked bank branches. As they are networked,
customers can access their accounts and perform certain transactions from
any of the bank’s branches. Broadly speaking, the customer is no longer a
customer of the branch but a customer of the bank. Core banking solutions
(CBS) is a combination of an application software and network devices. There is
a Central Data Centre. Data Centre is a large data housing infrastructure that
provides high band width access to its clients. The Data Centre houses many
services, Networking devices, Firewalls and other related equipments. The
figure below represents the technology and connectivity details in a very
simple structure for the implementation of the CBS.

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ITT Project Report Function of IT Department in CBS Environment.

The servers in the Data Centre could be many e.g., there are application
servers, Data Base Servers, Web server, mail server, Report Generating Servers
etc. It needs to be specifically emphasised that all the servers though placed in
the same Data Centre are not in the same Local Area Network (LAN). Each of
the servers are segregated using the concept of Virtual Local Area Network
(VLAN).

VLAN is a method of creating virtual networks within a physical network.

Each virtual network thus created will act a separate network. This concept
has got this advantages that, Data communication between the 2 VLANs can
be controlled as per business requirements. Thus, you will observe that in the
diagram application server and data base servers are on two different VLANs
(In the picture VLAN2 and VLAN3).

 THE VARIOUS COMPONENTS OF A CORE BANKING

ENVIRONMENT:

1. A Central Application Server that runs the core banking solutions (CBS).
The application is centrally accessed by the branches. There are different
core banking solutions available in the market like, Finacle developed by
Infosys, Flexcube developed by I-Flex Solutions, Bankmate developed by
the HCL Technologies, Quartz developed by TCS. There are other CBS
software also some developed in-house by the bankers; others developed
by other vendors.

2. Central Data Base Servers that store the data of the bank. It must be
noted only this data base server that is centrally located stores the data

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for the bank which means that the data for all of the branches of the bank
are stored in this central data base server.

3. Other infrastructure needed for internet banking and automated teller

machine (ATM) operations.

4. Necessary infrastructure to provide security for stored data and data

transferred across the network.

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ITT Project Report Function of IT Department in CBS Environment.

 FUNCTIONS OF IT DEPARTMENT IN CBS ENVIRONMENT:

A
s explained earlier, in core banking solution environment of
Information Technology functions (IT functions) are centralised at
the data centre. There are specific roles and responsibilities for
different individuals like in all IT Departments. There are certain functions
which are incompatible, which means that under no circumstance can one
individual perform two different functions as those specific functions are
sensitive. These functions have to be performed by two different individuals.
This concept is similar to what we are aware of in a purchase function. The
officer who is in charge of the purchase would not be the person who would be
passing the goods. The person who passes the purchase invoice will be
definitely different from these two. The rationale for the separation is that
control will be compromised. This is known as segregation of duties and is very
important in any computerized function.
A brief description of the roles of different individuals in an IT
Department is given below:

 Security Administration: It is advisable and necessary for all organizations

including banking to have a security policy which is approved at the Board
level. The officer in charge of the security administration is expected to
understand the policies and procedures mentioned in the security policy.
He should be able to assess the risks for non-compliance. His duties would
include deciding on access rules to data and other IT resources.

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 There will be separate set of people who will be Issuing of user ID

passwords and manage it. Monitoring the security architecture constantly
with a view to ensuring that there are no weak points which can be
exploited is the duty of security administrator. Security administrator
should not have any access to transaction level data.

 System Administration: This particular job is more sensitive. The Systems

Administrator has the powers to create, modify and delete users in
accessing the system. The individual is to be technically competent. He is
also expected to have a proven record of integrity. His duties would briefly
include the following:

 User creation.
 User deletion.
 Locating a branch code and providing connectivity to the branch.
 Creation of new products.
 Defining interest rates for deposit loans and other products.

 Be responsible for processing of end of day operations and beginning of day

operations.

 Be responsible for introducing latest application of the program.

 Data base administration: As the very name indicates, the Data Base
Administrator is the custodian of the bank’s data. He is responsible for

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ensuring that access is given to the Central Data Base in a secure manner in
line with business requirements. His responsibilities would include.

 Ensuring data integrity.

 Ensuring data availability.
 Ensuing security to access data.
 Importantly ensure recoverability of data in case of system failure.
 Maintaining size and volume of database and corresponding processes.

 Network Administration: Networking, generally and more specifically in a

core banking environment plays a very significant role. The Network
Administrator has the following important responsibilities:

 To place routers, switches and hubs at the appropriate places and

ensure a secure network configuration.
 Sensitive devises like firewalls and intrusion detection systems/ IPS
need to be strategically placed to ensure security for the network.
 At periodical intervals arrange for vulnerability assessment and
penetration tests to take corrective action whenever these tests throw
up weak points.

 Librarian: Normally we understand that the Librarian is in charge of

maintaining the Library, issuing books and receiving them back. In a
computerised environment, the Librarian has got similar functions
excepting that instead of dealing with books, he will be dealing with
software. As we are aware, the software, which is being developed and
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tested, would be clear as a complete product ready for use by the Project
Leader. Such a program then moves from a test environment into the
production environment. But there is an intermediary process by which the
Project Leader hands over the finished product to the Librarian. The
Librarian maintain records of the various versions of the program records all
the various versions of the program just as we have different editions of a
book and generally a later edition is expected to be important over the
earlier one. Similarly, software may have different versions and it is
extremely important to remember them and this number is referred to as
the version number. The Librarian has the following responsibilities:

 Moving the correct version of the software into production

environment.
 Maintain detailed documentation of all receipts and issues of software.
 Keep a record of all licenses obtained for the usage of software.
 Be in charge of user manual and system manual.

None of these groups of administrators should have access to the database

having transaction data. Implementation of maker checker concept will ensure
proper segregation of duties.

 Changed Management Procedures:

In the normal course, due to any change in the business process or

upgradation of technology or due to program bugs discovered subsequent
implementation changes are warranted in hardware, software and
communication systems. There needs to be a well-documented procedure in
place and a strict adherence to such procedure. Changes to hardware and
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communication systems need to be entered in a register apart from a softcopy

of the register being available on the system. The latest copy of the network
program should always be available. These documents should always be
maintained up to date incorporating all the changes and the dates when such
changes have been incorporated.

 Application Software:

There needs to be a control on the various versions of software. At the

stage of initial implementation of the software (for the first time software
which has been debugged thoroughly moved from the test environment to the
production environment) a specific version number should be provided e.g.
CBS Version No: 1.1. There needs to be a document which contains details
regarding the Version No. and date of implementation.

Thereafter for all subsequent procedures, there needs to be a strict procedure

to be adhered to. The procedures would be as follows:

 There should be a specific request from an authorised person like the

Manager of the user department. The request should be approved by
the person in charge of the Systems Department.
 Changes to programs should necessarily be made in the test
environment.
 After thoroughly debugging the program, the corrected program would
be handed over to the Librarian.
 The Librarian would then give the next Version No. for the changed
program, e.g. Version No: 1.2 (as compared to the previous Version
No:1.1).

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 The documentation would contain details of the changes made and the
date when it was made.

 Strict adherence to the procedures and technologies:

The changes would ensure that the corrected latest version of the
program alone is used. If such a procedure is not strictly adhered to, there is
every possibility of an earlier version of the program being used, which would
result in inaccurate processing.

 Organization Structure of the IT Department:

The standard for the organization structure for the IT Department is the
same whether it is a banking environment or any other. The standards
stipulate as follows:

 Production environment should be different from development

environment.
 In the development environment all aspects of the program viz.,
functionality, built in controls, etc., will be tested by both the users as
also the programmers. The programmers would test it first and then it
would be provided to the user department for them to test it. This
version is called the ‘beta version’. Various types of tests like unit test,
system test, and integration test conducted at this stage.
 After it has been tested by the users also, the Project Leader would hand
over the software copy to the Librarian, who after completing the

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necessary documentation, transfers the program into the production

environment. This is also known as user acceptance test (UAT).
 No one in the development and testing environments should have
access to the production system.
 Production system is in a live environment and is accessible only by
authorized users.
 Under no circumstances, should there be any connectivity between a
test server and a production server.

As already discussed, there are certain incompatible functions which under no

circumstances should be performed by the same individual. The Matrix
provided below highlights the functions which are incompatible and those
which are not.

Help desk Database Network Security Tape

Admin Admin admin Librarian
Help desk
Database
Admin
Network
Admin
Security
admin
Tape
Librarian

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CBS WORKING

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 KEY MODULES OF CBS:

A. Back Office:
The Back Office is the portion of a company made up of
administration and support personnel, who are not client-facing. Back
office functions include settlements, clearances, record maintenance,
regulatory compliance, accounting, and IT services. Back Office
professionals may also work in areas like monitoring employees’
conversations and making sure they are not trading forbidden securities
on their own accounts.

B. Data Warehouse:

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Banking professionals use data warehouses to simplify and

standardize the way they gather data – and eventually get to at least
one clear version of the reality. Data warehouses lookout of the difficult data
management – digesting large quantities of knowledge and ensuring
accuracy – and make it easier for professionals to research data.

C. Credit Card System:

Credit card system provides customer management, credit card

management, account management, customer information
management and general ledger functions; provides the online
transaction authorization and service of the bank card in each transaction
channel of the issuing bank; Support in the payment application; and at the
same time, the system has a flexible parameter system, complex organization
support mechanism and product factory based design concept to speed
up product time to market.

D. Automated Teller Machines (ATM):

An Automated Teller Machine (ATM) is an electronic banking

outlet that permits customers to finish basic transactions without the
help of a branch representative or teller. Anyone with a mastercard or
open-end credit can access most ATMs. ATMs are convenient, allowing
consumers to perform quick, self-serve transactions from everyday banking

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like deposits and withdrawals to more complex transactions like bill

payments and transfers.

E. Central Server:

Initially, it used to take at least a day for a transaction to get

reflected in the real account because each branch had their local
servers, and the data from the server in each branch was sent during a
batch to the servers within the data centre only at the top of the day
(EOD). However, nowadays, most banks use core banking applications to
support their operations creating a Centralized Online Real-time Exchange
(or Environment) (CORE). This means that all the bank’s branches access
applications from centralized data centres/servers, therefore, any
deposits made in any branch are reflected immediately and customer
can withdraw money from any other branch throughout the world.

F. Internet Banking:

Also referred to as Online Banking, is an electronic payment

system that permits customers of a bank or other financial organization to
conduct a variety of monetary transactions through the financial
institution’s website. The online banking system offers over 250+
services and facilities that give us real-time access to our bank account. We
can make and receive payments to our bank accounts, open Fixed and
Recurring Deposits, view account details, request a cheque book and a
lot more, while you are online.

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G. Mobile Banking:

Mobile Banking is a service provided by a bank or other financial

that allows its customers to conduct financial institution that allows its
customers to conduct financial transactions remotely using a mobile
device like a Smartphone or tablet. Unlike the related internet banking,
it uses software, usually called an app, provided by the financial
organization for the aim. Mobile banking is typically available on a 24-
hour basis

H. Phone Banking:

It is a functionality through which customers can execute many of

the banking transactional services through Contact Centre of a bank over
phone, without the need to visit a bank branch or ATM. Registration of
Mobile number in account is one of the basic perquisite to avail Phone
Banking. The use of telephone banking services, however, has been
declining in favour of internet banking. Account related information,
Cheque Book issue request, stop payment of cheque, Opening of Fixed
deposit etc. are some of the services that can be availed under Phone
Banking.

I. Branch Banking:

CBS are the bank’s centralized systems that are responsible for
ensuring seamless workflow by automating the frontend and backend
processes within a bank. CBS enables single-view of customer data
across all branches in a bank and thus facilitate information across the
delivery channels. The branch confines itself to the following key functions:

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 Creating manual documents capturing data required for input into

software.
 Internal authorization.
 Initiating Beginning-Of-Day (BOD) operations.
 End-Of-Day (EOD) operations.
 Reviewing reports for control and error correction.

The platform where communication technology and information technology

are merged to suit core needs of banking is known as core banking solutions.

Here, computer software is used to perform core operations of banking like

recording of transactions, passbook maintenance, and interest calculations on
loans & deposits, customer records, balance of payments and withdrawal.
Normal core banking functions will include deposit accounts, loans, mortgages
and payments. Banks make these services available across multiple channels
like ATMs, Internet banking, and branches.

 COMPONENTS AND ARCHITECTURE OF CBS:

 Technology Components of CBS:

The software resides in a centralized application server which is in

the Central Office Data Centre, so the application software is not
available at the branch but can be accessed from the branches or online.
Along with database servers and other servers, an application server is
located at the Central Data Centre. The CBS deployed by the Banks as a
part of the CBS Project includes Data Centre (DC) and the Disaster Recovery

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Centre (DRC). With the introduction to core banking systems, a customer

is not only having accessibility with the branch but to the bank.

The key technology components of CBS are as follows:

 Database Environment: This consists of the centrally located

database servers that store the data for all the branches of the
bank which includes customer master data, interest rates, account
types etc. Whenever a customer requests for a particular service to be
performed, the application server performs a particular operation
it updates the central database server. The databases are kept
very secure to prevent any unauthorized changes.
 Application Environment: In general, Application environment
consist of the application servers that host the different core
banking systems like FlexCube, bankMate etc. and is centrally
used by different banks. The access to these application servers will
generally be routed through a firewall.
 Cyber Security: Comprehensive Cyber Security Framework is
prescribed by RBI for Banks to ensure effective information
security governance. Some key features of Cyber Security
Framework as prescribed by are RBI for banks are as under:
i. Network Security and Secure Configuration: The following key
measure are required to be implemented:
 Multi-layered boundary defence through properly configured
proxy servers, firewalls, intrusion detection systems to protect
the network from any malicious attacks and to detect any
unauthorized network entries.

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 Different LAN segments for in-house/onsite ATM and CBS/branch

network to confirm the adequacy of bandwidth to deal with the
volume of transactions so as to prevent slowing down and
resulting in lower efficiency.
 To ensure secure network configuration; proper usage of routers,
hubs and switches should be envisaged.
 Periodic security review of systems and terminals to assess the
network’s vulnerability and identify the weaknesses.
 Identification of the risks to ensure that risks are within the
bank’s risk appetite and are managed appropriately.

ii. Application Security: Full-fledged Security policy to ensure

Confidentiality, Integrity and Availability (CIA) of data and
information needs to be development and implemented covering
following key features:
 Implementation of bank specific email domains (example, XYZ
bank with mail domain xyz.in) with anti-phishing (security
measures to prevent steal of user data) and anti-malware
software (software tool/program to identify and prevent
malicious software/malware from infecting network) with
controls enforced at the email solution.
 Two factor authentication, an extra step added to the log in
process, such as a code sent to user’s phone or a fingerprint
scan, that helps verify the user’s identity and prevent
cybercriminals from accessing private information.

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 Implementation of Password Management policy to provide

guidance on creating and using passwords in ways that maximize
security of the password and minimize misuse or theft of the
password.
 Effective training of employees to educate them to strictly avoid
clicking any links received via email.
 Proper reporting mechanism to save the banks from the effects
of misconduct – including legal liability, lasting reputational
harm, and serious financial losses.
 Required to conduct effective due diligence and oversight to
thoroughly assess the credentials of vendors/third party service
providers/partners and making non-disclosure and security
policy compliance agreements mandated for them.
 Effective change management process to record/ monitor all the
changes that are moved/ pushed into production environment.
 Robust configuration management processes to register changes
to business applications, supporting technology, service
components and facilities.
 Incident response and management mechanism to take
appropriate action in case of any cyber security incident with
well written incident response procedures elaborating the roles
of staff handling such incidents.
 Capturing of the audit logs pertaining to user actions and an alert
mechanism to monitor any change in the log settings.
 Continuous surveillance to stay regularly updated on the latest
nature of emerging cyber threats.

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iii. Data Centre and Disaster Recovery Centre: The core banking
systems consist of a Data Centre which includes various
application servers, database servers, web servers etc. and
various other technological components. The bank should
adopt full-fledged documentation and prepare necessary
manuals dealing with the disaster recovery procedures.
Arrangements for alternate connectivity of the banks with the
data center should be established whenever there
is a disruption in the primary connectivity. Proper
awareness should be created among the employees through
periodic trainings and mock drills.
iv. Online Transaction monitoring for fraud risk management: Risk
evaluations are carried out and considering the risk profile and
other regulatory requirements of the bank, effective monitoring
should be done as a part of managing fraud risk management
across all delivery channels. There are also methods that facilitate
fraud reporting in CBS environment. Proper alert system should
be enabled to identify any changes in the log settings and the
audit logs pertaining to user actions are captured.

Some key aspects in-built into architecture of a CBS are as follows:

 Information flow: This facilitates information flow within the bank

and improves the speed and accuracy of decision-making. It
deploys systems that streamline integration and unite corporate
information to create a comprehensive analytical infrastructure. It
ensures various interfaces like payment channels, ATM,

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mobile/internet banking, Point of Sale (PoS) capability are readily

available.
 Customer centric: Through a holistic core banking architecture,
this enables banks to target customers with the right offers at the
right time with the right channel to increase profitability.
 Regulatory compliance: This holds the compliance for banks
which is complex and expensive. CBS has built-in and regularly
updated regulatory platform which will ensure compliance by
providing periodic regulatory and compliance reports required for
the day-to-day operations of the bank.
 Resource optimization: This optimizes utilization of information
and resources of banks and lowers costs through improved asset
reusability, faster turnaround times, faster processing, and
increased accuracy.

 CBS IT Environment:

The Fig. below provides an overview of CBS IT environment with

client access devices at the top which interface with channel servers
which in turn interface with application servers which are connected to
the database servers hosted on windows/Unix platform.

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CBS is a Technology environment based on Client-Server Architecture,

having a Remote Server (called Data Centre) and Client (called Service Outlets
which are connected through channel servers) branches. The Server is a
sophisticated computer that accepts service requests from different machines
called Clients. The requests are processed by the server and sent back to the
clients. These concepts are further explained below:

A. Database Server:

The Database Server of the Bank contains the entire data of the Bank.
The data would consist of various accounts of the customers and master
data (example of master data are customer data, employee data, base rates
for advances, FD rates, the rate for loans, penalty to be levied under
different circumstances, etc.). Application software would access the
database server.

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B. Application Server:

All the transactions of the customer are processed by the data center.
The Application Server performs necessary operations, and this update the
account of the customer ‘A’ in the database server. The customer may
do some other operation in branch “Y”. The process is validated at branch
“Y” and the data is transmitted to the application software at the data
center. The results are updated in the database server at the centralized
data center. Thus, it would be observed that whatever operations a
customer may do at any of the branches of the bank, an accounting
process being centralized at the centralized data center is updated at the
centralized database.

C. Automated Teller Machine (ATM) Channel Server:

This server contains the details of ATM account holders. Soon after the
facility of using the ATM is created by the Bank, the details of such
customers are loaded on to the ATM server. When the Central Database
is busy with central end-of- day activities or for any other reason, the file
containing the account balance of the customer is sent to the ATM
switch. Such file is called Positive Balance File (PBF). This ensures not only
continuity of ATM operations but also confirms that the Central
database is always upto date. The above process is applicable to stand
alone ATMs at the branch level. As most of the ATMs are attached to the
central network, the only control is through ATM Switch.

D. Internet Banking Channel Server (IBCS):

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Just as in the case of ATM servers where the details of all the account
holders who have ATM facility are stored, the Internet Banking database
server stores the username and passwords of all the internet banking
customers. IBCS software stores the name and password of the entire
internet banking customers. The ATM server does not hold the PIN
numbers of the ATM account holders. IBCS server also contains the
details about the branch to which the customer belongs. The Internet
Banking customer would first have to log into the bank’s website with the
username and password.

E. Internet Banking Application Server:

The Internet Banking Software which is stored in the IBAS (Internet
Banking Application Server) authenticates the customer with the login
details stored in the IBCS. Authentication process is the method by
which the details provided by the customer are compared with the data
already stored in the data server to make sure that the customer is
genuine and has been provided with internet banking facilities.

F. Web Server:

The Web Server is used to host all web services and internet related
software. All the online requests and websites are hosted and serviced
through the web server. A web server is a program that uses HTTP
(Hypertext Transfer Protocol) to serve the files that form web pages to

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users, in response to their requests, which are forwarded by their

computers’ HTTP clients. Dedicated computers and appliances may be
referred to as web servers as well. All computers that host web sites
must have web server programs.

G. Proxy Server:

A Proxy Server is a computer that offers a computer network service to

allow clients to make indirect network connections to other network
services. A client connects to the proxy server, and then requests a
connection, file, or other resource available on a different server. The
proxy provides the resource either by connecting to the specified server
or by serving it from a cache and hence often used to increase the speed
and managing network bandwidth. In some cases, the proxy may alter
the client’s request or the server’s response for various purposes. It serves
as an intermediary between the users and the websites they browse for.

H. Anti-Virus Software Server:

The Anti-Virus Server is used to host anti-virus software which is

deployed for ensuring all the software deployed are first scanned to ensure
that appropriate virus/malware scans are performed.

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 BIBLIOGRAPHY

Board of Studies, T. I. (2021). CA Intermediate "Enterprise Information

Systems". Delhi: The Institute of Chartered Accountants of India.

Choudhary, R. (2021, Jan). Retrieved from Bank.CAknowledge:

https://bank.caknowledge.com/core-banking-systems/

Desai, A. (2021, Jan). Retrieved from Scribd:

https://www.slideshare.net/ashishrdesai/5-core-banking-system

Finezza. (2021, Jan). Retrieved from Finezza: https://finezza.in/blog/core-

banking-solution/

India, T. I. (2017). Information Technology (ICITSS). Delhi: The Institute of

Chartered Accountants of India.

VARIA, D. V. (2021, Jan). Retrieved from Academia:

https://www.academia.edu/34417600/Core_Banking_Solutions_For_ICI
TSS_CA_ICAI_Students

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