Banking Information System

7/29/2019 Banking Information System

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BANKING INFORMATION

SYSTEM


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TECHNOLOGY AND BANKING

Banking TechnologyInformation

Storage

ProcessingTransmission

Tasks Common to

Both


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Pervasive Branch

Network

Global Operations

Complex Credit

Calculations

Innovative Risk

Management

Mass Transaction

& Items Processing


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Focus aspects of Commercial Bankingnow are:

Core

Banking (CBS)

ATMs

CardManagement

Any Branch

BankingDocument

Management

Risk

Management

Resource

Management

MIS &

Intranet

CRM

Corporate

Network

Electronic

Banking

POS Terminalsand Cashdispenser

BANKS BUSINESS

BANKS BUSINESS

RAIS

ING

DEPOSITS

LOANS&M

ISC.SERVICES


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Financial Technology Infrastructure

Data Center to host servers for:

CBS ATM/Financial Switch

Internet Banking

DW/DM/CRM/MIS etc.

Back-office Application E-mail Servers, Internet Server,

Enterprise-wide Network & NetworkingEquipment

Security SystemsSystems at Branches/RO/ZO/CO Depts.

Supporting Systems

Disaster Recovery Site & Business Continuity


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Structured Financial Messaging System

Branch-1

Bank-1 Gateway Bank-2 Gateway Bank-n Gateway

Branch-2 Branch-n Branch-1 Branch-2 Branch-n Branch-1 Branch-2 Branch-n

Central Server at

IDRBT

..... ......

..


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SBI HISTORY

State Bank of India (SBI) is the largest banking and financialservices company in India by revenue and total assets.

Its a state-owned corporation with its headquartersin Mumbai, Maharashtra.

SBI provides a range of banking products through its vastnetwork of branches in India and overseas, including productsaimed at non-resident Indians (NRIs).

The State Bank Group, with over 16,000 branches, has thelargest banking branch network in India. SBI has 14 Local HeadOffices and 57 Zonal Offices that are located at importantcities throughout the country. It also has around 130 branchesoverseas.
http://en.wikipedia.org/wiki/Financial_servicehttp://en.wikipedia.org/wiki/Financial_servicehttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Non-resident_Indianhttp://en.wikipedia.org/wiki/Non-resident_Indianhttp://en.wikipedia.org/wiki/Non-resident_Indianhttp://en.wikipedia.org/wiki/Non-resident_Indianhttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Financial_servicehttp://en.wikipedia.org/wiki/Financial_service


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ELITEX-2008 8

Changes brought in IT

Late 1990sMore than 8000 branches either on

decentralized systems or manually operated,

Main Frame / Mini Computers used at CO/LHO/ZO

for backend operations. Internet Banking Facility for individuals.

All ATMs of State Bank Group networked.


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ELITEX-2008 9


2001 - KMPG appointed consultant for preparing IT

Plan for the Bank. Core Banking proposed, FNS,

CS, COMLINK selected

2002All branches computerized but ondecentralized systems,

Core Banking initiative started


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ELITEX-2008 10


2008- more than 6500 branches (95% of business)on Core Banking Solution (CBS),

Internet Banking facility for Corporate customers

More Interfaces developed with eCommerce &other sites through alternate channels like ATM &Online Banking

All Foreign Offices on Centralized Solution

BPR initiative to realign business process withchanges due to IT


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ELITEX-2008 11


Large Network as backbone for connectivity across

the country

Multiple Service Providers for providing the links

BSNL, MTNL, Reliance, Tata & Railtel Multiple Technologies to support the networking

infrastructureLeased lines, Dial-up, CDMA &

VSATs


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ELITEX-2008 12

TBA - Distributed System Components

Banking

Application

OS, Database

Internet-Banking

ATM

Diskless

nodesLAN

Branches

System AdministratorUser Control Officer


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ELITEX-2008 13

CBS - Core Banking System ComponentsDatacenter

Network Administrators

Core-Banking Application

OS, Database

Internet-Banking

ATM

Desktops,

Branch

Servers

WAN, Internet

Branches

Application Developers

System AdministratorsBranch User/Admins

Alternative

Channels


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ELITEX-2008 14

Organization structure of IT

DMD(IT)

GM (IT) & CISO

DMD (I&A)

CGM (IT)

GM (ITSS)

DGM (ITSS)

AGM (ITSS)

GM (I&A)

CIOCGM (I&A)

Application Owners


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ELITEX-2008 15

Organizational Structure of IS

AGM (ISD)

Information Security Officers

DMD(IT)

GM (IT) & CISO

FUNCTIONS

Consulting Monitoring Compliance

2003 - Information Security consultant appointed for InformationSecurity Initiation

2004 - Information Security Department setup headed by

GM (IT) & CISO and supported by CISA qualified ISOs

ISSSC setup by the Board


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ELITEX-2008 16

Objective of IS

To provide banks business processes with reliable

information systems by systematically assessing,

communicating and mitigating risks, therebyincreasing customers trust on the bank and

achieving world class standards in information

security.


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SERVICES PROVIDED BY SBI INTERNET

BANKING

E-Ticketing

SBI E-Tax

Bill Payment

RTGS/NEFT

E-Payment

Fund Transfer

Third Party Transfer

Demand Draft

Cheque Book Request

Account Opening Request Account Statement

Transaction Enquiry

Demat Account Statement

Donation


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ELECTRONIC FUND TRANSFER

The Funds Transfer facility enables you to transferfunds within your accounts in the same branch orother branches of SBI. You can transfer aggregatingRs.1 lakh per day to own accounts in the same branch

and other branches The Funds Transfer facility also enables to transfer

money to trusted third parties who are SBI accountholders.

For transferring money into other banks RTGS & NEFT

is used. For a fund transfer of Rs. 2 lakhs & above RTGS(Real Time Gross Settlement) is used.

In NEFT (National Electronics Fund Transfer) there is nominimum limit for fund transfer.


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ELECTRONIC FUND TRANSFER

RTGS & NEFT system of fund transfer facilitates moneytransfer between SBI account & accounts in other banks& vice versa in India

RTGS- this transaction happens on real time & gross

settlement basis. NEFT- In this transaction happens in batches

1.) 6 settlements on weekdays - at 09:00, 11:00, 12:00,13:00, 15:00 and 17:00 hrs.

2.) 3 settlements on Saturdays - at 09:00, 11:00 and 12:00hrs.

SWIFT (Society for Worldwide Interbank FinancialTelecommunication) is a means of secure internationalfinancial messaging.


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MAJOR CUSTOMERS OF INSTANT

FUND TRANSFER IN SBI Food Corporation of India Instantaneous transfer of funds, at 3000+ branches eliminatingdelays & reconciliation issues

ONGC

Online vendor payments across the country enabled by SBI

IOC Same day credit to IOC for Dealer transactions across the countryeither online or through sweep facility

Ministry of Agriculture

All Pay and Account offices under the Ministry are making Vendorpayments electronically through our CMP. This is shortly beingextended to Department of Revenue (MoF) & Ministry of ExternalAffairs.


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PAYMENTS OF SOCIAL SECURITY

BENEFITS SBI is working with the Govt. of Andhra Pradesh to enable payment of Social

Security Pension and payment of stipends under the National Rural

Employment Guarantee Scheme (NREGS)

Over 1 mm No Frills savings account have been/are being opened in the

names of the beneficiaries, into which the Govt. benefits are paid

SBI Tiny Cards based on smart Card technology provided to the beneficiaries

who can withdraw money/deposit money by simply swiping their SBI Tiny

Cards on a hand-held device with the Business Correspondent/Business

Facilitator in their village. SBI tied up with INDIA POST for this purpose

SBI is also working closely with Govt. of Rajasthan in the Bhamashah scheme

for upliftment of families below poverty line SBI Tiny Card to enable

Payment of insurance premium

Payment of SIP Mutual Funds

Recharging of Mobile phones


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RECEIPTS

Online Tax Accounting System (OLTAS) / Electronic Accounting

System in Excise and Service Tax (EASIEST)

Online Direct Taxes Collection of Govt. of India (Income Tax /

Corporation Tax etc)

Banks are reporting transactions through electronic strings to RBI for funds settlement and to the website of TIN of CBDT for update of

Assesse data

Data extracted at SBIs state-of-the-art data centre at Navi Mumbai

the same day and processed funds settled on the next day itself

Enabling Govt. to view their collection of Direct Taxes throughout the

country on a daily basis

Central Excise & Service Tax Collection is done similarly


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RECEIPTS

E- FREIGHT E-TICKETING

New facility started with Indian Railways Railway ticketing through the banks

Internet banking process

Facility of e-payment of freights to

corporates

Booking of railway tickets through

internet banking.

Nearly 100 corporates have been coveredin this system.

Nearly 20% of tickets sold on only westernrailway is through e-ticketing or e- rail.


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RECEIPTS

Cyber Treasury Centralised Settlement andReconciliation of PPF

Technology partnerships with

various State Governments

PPF transactions

takes place at all 4500 branches

hits the Banks centralised system

Simultaneously

Large number of small value taxes

commercial tax, VAT, CST, etc.

remitted by public through internet

Timely settlement of funds with

RBI

Remitters get a cyber receipt MIS to the Govt. to enable Govt. to

monitor & better manage its

liquidityProject running in 6 states, MP,

Haryana, Chhattisgarh, Gujarat,

Rajasthan

Electronic MIS is provided to the

State Governments


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ADVANTAGES TO CUSTOMERS

It is convenient.

It isn't bound by operational timings.

There are no geographical barriers.

Services can be offered at a miniscule cost. Check your transactions at any time of the day,

and as many times as you want to.

Getting quarterly statements from the bank,

transferring funds to outstation, and other suchactivities can be done free of charge throughonline banking.


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ADVANTAGES TO BANK

Very low setup cost.

Capability to cater to a very large customer

base.

Saves a lot of operational costs. Adds to the

baseline.

Banks san offer a lot of personalized services

to their customers.

Reduction of burden on branch banking.


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ADVANTAGES DISADVANTAGES

Check account balances and track

recent account activity

Need an account with an Internet

Service Provider (ISP)

Transfer money between accounts Security concerns, like hackers

accessing your bank accounts

Authorize electronic bill payments Original setup for bill paying time is

time-consuming but will ultimately be

a time-saver

Issue stop payment requests Switching banks can be more

cumbersome online than in person

Apply for auto, mortgage, home equity,

student, or personal loans

Must have basic computer skills and

Internet knowledge

Receive investment product and

service information

Must be comfortable using a

computer

ADVANTAGES & DISADVANTAGES OF E-BANKING


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Technology Vision of the RBI

Centralised DatabaseManagement System

Enterprise KnowledgeManagement System

Integrated AccountingSystem Integrated GovernmentAccounting System Currency OperationsSystem

Desk Top Decision Making Capability

Desk Top Analytical Capability

Desk Top Transactional Capability

Securities Settlement

System

Integrated Establishment

System

Offsite Supervisory

Systems

Integrated Forex

Management System

Human Resource

Information System


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The pre-requisites for

TechnologyPlanning for disasters

Increased operational risk

Business Continuity Planning

Business Process Re-engineering

Human Resource Empowerment


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DISASTER RECOVERY SYSTEM

Its a replica of CDC(central database collection)

Many banks have 100% replicated remote DRsites,automated protocols and processes anddedicated trained staff.

Disaster management involves:

(i) pre-disaster planning, preparedness,monitoring including relief managementcapability,

(ii) prediction and early warning, and

(iii) damage assessment and relief management.


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DRS

Experts recommend a three-pronged DR strategy for any

IT driven organization:

(i) prevention, which can totally avoid or minimize

occurrence of disasters,(ii) anticipation, in which likely disaster scenarios can be

identified and preventive action taken

(iii) mitigation in which corrective steps can be initiatedat the right time to minimize the impact of disasters

sas er ecovery


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sas er ecoveryManagement-benifits

minimizing interruptions in operations;resuming critical operations within a specifiedtime after a disaster;

minimizing financial loss;maintaining a positive public image of theorganization

Bank can provide continuous service to thecustomers,

Without seriously affecting the back end

operations of the bank

CORPORATE BANKING:-


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CORPORATE BANKING:

The Online SBI corporate banking application provides features to administerand manage corporate accounts online. The corporate module provides

roles such as Regulator, Admin, Up loader, Transaction Maker, Authorizer,and Auditor. These roles have access to the following functions:

Manage users, define rights and transaction rules on corporate accounts

Access accounts in several branches with a single sign-on mechanism

Upload files to make bulk transactions to third parties, supplier, vendor andtax collection authorities.

Use online transactional features such as fund transfer to own accounts,third party payments, and draft issues

Make bill payments over the Internet.

Authorize, modify, reschedule and cancel transactions, based on rightsassigned to the user

Generate account statement

Enquire on transaction details or current balance

l


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NSDL Site -Pay Tax Online

S l t Ch ll T


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Select Challan Type

E t Ch ll D t il


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Enter Challan Details

C fi A D il


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Confirm Assesses Details

L t O li SBI


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Logon to OnlineSBI


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How ATMs Work?


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How ATMs Work?cont.


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New Technologies

- Biometrics

- Cheque / cash acceptation

- Barcode scanning

- Ondemand printing of item value

- Display additional media such as phone card

- Coordination of ATMs with mobile phone

- Customer specific advertising-

Weaknesses:-


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Weaknesses:

Lack of awareness among the existing customers

regarding internet banking Obsolesce of technology take place very soon specially

in terms of security on internet.

Procedure for applying for id and password for usingservices related to internet banking takes time.

Lack of knowledge is found regarding internet bankingin employees of SBI

Implementation of newer technology is little bitcomplicated

Employees needs training to obtain knowledgeregarding I-banking

Challenges:-


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Challenges:

Maintaining Business Edge over competitors in the

context of sameness in IT infrastructure

Multiple vendor support is necessary for working of

highly complex technology

Maintaining secured IT infrastructure for business

operations

Alternative must be there in case of failure of

system


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ELITEX-2008 44

Security Awareness

User awareness through multiple channels like intranet,

training etc.

e-Learning package on information security distributed

across Bank

Specialized IS awareness sessions for controllers

Dedicated IS Security sessions during training.

Observing Computer Security Day every year across

the organization.

Write ups on Information Security in the in-housemagazines

Exchange of information on threats and vulnerabilities at

appropriate forums.


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ELITEX-2008 45

Improving our IS Security

Benchmarking SBI initiatives against International

Best Practices

E&Y benchmarking initiative in 2006

RBI requirement under section 35

External audit of IS initiatives

BS27001 certification of CDC-DRC, ATM & INB


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ELITEX-2008 46

Challenges ahead

Retaining Bank's lead Position

Maintaining Business Edge over competitors in the

context of sameness in IT infrastructure

Assured Availability Financially critical systems increasingly depend on IT

Delivery channels- no margin for downtime

Infrastructure derisking

Tie-up with multiple vendors for spreading risks due toinfrastructure failures and obsolescence


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ELITEX-2008 47

Challenges ahead

Managing IS Security

Information Security dependency on vendor inputs

Complex networked environment leading to lack of

Know Your - Employee , Systems & Procedures , Vendors

Maintaining Confidentiality & Privacy of Data while instorage, transmission & processing.

Providing DRP & BCP in a complex technology

infrastructure supported by multiple vendors


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Issues in ImplementationLess than 10% of failures are due to technical snags most are due topoor management and implementation

Resistance to change

Overlooking processreengineering

Project managementDedicated project teams

Change management

Policies

People Skills & Training

Basic Infrastructure

telecom,power

Security

Privacy & confidentiality

Legal and regulatory issues


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Many Benefits of Technology

Increased operational efficiency, profitability &

productivity

Superior customer service

Multi-channel, real-time transaction processing

Better cross-selling ability

Improved management and accountability

Efficient NPA and risk management

Minimal transaction costs

Improved financial analyses capabilities


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FINANCIAL MANAGEMENT


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INPUTS

PAYMENTS

RECEIPTS

DATA FROM STOCK EXCHANGES OF SHARE

PRICES


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PROCESS

APPLICATIONS

ACCOUNTING

QUERY

DECISION ANALYSIS

CONTROL


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OUTPUTS

REPORTS

STATUTORY COMPLIANCE


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USES

INFORMATION UPDATES

OPERATION UPDATES

DECISION ANALYSIS

ACTION UPDATE


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Banking Information System

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