JAIIB AFB Unit 26 - Operational Aspects of CBS Environment

Core Banking Solutions (CBS)

Core Banking is the integrative approach that efficiently unites different banking systems in selling their products and services with the aid of information technology. Unison of different banking system facilitates to open up the market thus ideally increases the opportunity for banks to acquire more customers and a better customer retention.

Core Banking Solutions (CBS) is the process which is completed in a centralized environment i.e.Core Banking Solution under which the information relating to the customer’s account i.e. financial dealings, profession, income, family members etc are dealt with. These information are stored in the Central Server of the bank that is available to all the networked branches instead of the branch server. The word Core in Core Banking Solutions (CBS) stands for Centralized Online Real-time Environment.

CBS is networking of branches, which enables customers to operate their accounts, and avail banking services from bank on CBS network, regardless of where they maintain their account. Thus, CBS is a step towards enhancing customer convenience through "Anywhere and Anytime Banking".

Need for Core Banking Solution

1. Improve operational efficiency - reduce cost of operations
2. Improve customer service
3. Comply with Anti Money Laundering (AML) / Know Your Customer (KYC) requirements
4. Integrate with electronic payment systems

Benefits of CBS

CBS will provide the following benefits:

1. Anytime and Anywhere banking (online mediums/SMS)
2. Standardised, simple and automated processes
3. Increase in quality of the service provided to the customers
4. Timely and accurate information for management decision making
5. Strong audit and internal controls
6. Bring down the cost of transaction and thereby improving operational efficiency
7. Paving way for new value added services thereby generating additional revenue for the Department

Objectives of CBS

The key objectives are as below:

1. To increase the number of customers
2. To provide multiple delivery channels like internet, mobile banking, ATMs, thereby bringing access to financial services to the doorsteps of the customers
3. To enable faster money fund transfers to reach out to more customers
4. To become one stop solution for financial inclusion initiatives of the Government of India