Banking Software Selection & Use
TYPES OF SOFTWARE USED IN BANKS 1.
CORE BANKING
Core banking is services provided by a group of networked bank branches. Bank customers may access their funds and other simple transactions from any of the member branch offices. Core Banking is normally defined as the business conducted by a banking institution with its retail and small business customers. Many banks treat the retail customers as their core banking customers, and have a separate line of business to manage small businesses. Larger businesses are managed via the corporate banking division of the institution. Core banking basically is depositing and lending of money. Nowadays, most banks use core banking applications to support their operations where CORE Banking stands for "centralized online real-time electronic banking". This basically means that all the bank's branches access applications from centralized datacenters. This means that the deposits made are reflected immediately on the bank's servers and the customer can withdraw the deposited money from any of the bank's branches throughout the world. These applications now also have the capability to address the needs of corporate customers, providing a comprehensive banking solution. A few decades ago it used to take at least a day for a transaction to reflect in the account because each branch had their local servers, and the data from the server in each branch was sent in a batch to the servers in the datacenter only at the end of the day (EoD). Normal core banking functions will include deposit accounts, loans, mortgages and payments. Banks make these services available across multiple channels like ATMs, like ATMs, Internet Internet banking, banking, and branches. 2.
CREDIT CARD
“A small plastic card issued by a bank, allowing the holder to purchase goods or services on credit”.
Credit Card software manages end to end process starting from application/request, Issuance and Activation, Management of PIN, Transaction Processing and Statement Generation, Recovery of Charges, till settlement of transactions coming from various channels like POS, ATM, and Internet etc. Credit Card software maintains all the static details as well as financial details of the credit card.
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Banking Software Selection & Use
3.
DEBIT CARD
“A card allowing the holder to transfer money electronically and withdraw cash through ATM from their bank account when making a purchase”
Debit/ATM Card software is integrated with the CORE banking solutions. Interface is designed between these softwares for communication. Debit Card software manages information capturing, linkage of debit card with CORE banking account, card generation and activation, Management of PIN, Transactions routing to CORE banking and confirmation till settlement of transactions coming from various channels like POS, ATM and Internet etc. Only static details and transaction logs are maintained in the Debit Card application, whereas financial entries are passed in the CORE banking. 4.
PREPAID CARD
A card issued by a financial institution that is preloaded with funds and is used like a normal credit card. A prepaid credit card works in the opposite way of a normal credit card, because instead of buying something with borrowed funds (through credit), you buy things with funds that have already been paid. This card functions like a gift card. Prepaid Card software manages end to end process starting from application/request, Issuance and Activation, Management of PIN, Transaction Processing, Recovery of Charges, till settlement of transactions coming from various channels like POS, ATM, and Internet etc. Prepaid Card software maintains all the static details as well as financial details of the credit card. 5.
CONSUMER LENDING APPLICATIONS
Consumer lending software platform is uniquely positioned to enable financial institutions to quickly configure a solution that provides complete end-to-end loan origination processing for all types of consumer lending applications, including personal loans, home loans, revolving line of credit, and auto loans. These also serve as workflow application. 6.
WORKFLOW APPLICATIONS
A workflow application is a software application which automates, to at least some degree, a process or processes. The processes are usually business-related but can be any process that requires a series of steps to be automated via software. Some steps of the process may require human intervention, such as an approval or the development of custom text, but functions that can be automated should be handled by the application. Advanced applications allow users to introduce new components into the operation. For example, consider a purchase order that moves through various departments for authorization and eventual purchase. The order may be moved from department to department for approval automatically. When all authorizations are obtained, the requester of the purchase 2|Page Hailey College of Banking & Finance
Banking Software Selection & Use
order is notified and given the authorization. A workflow process may involve constant change and update. For example, the normal approver of purchase orders may be on vacation, in which case, the application will request approval from alternate approvers. 7.
HUMAN RESOURCE MANAGEMENT SYSTEM
A Human Resources Management System (HRMS) or Human Resources Information System (HRIS), refers to the systems and processes at the intersection between human resource management (HRM) and information technology.. The function of human resources (HR) departments is generally administrative and common to all organizations. Organizations may have formalized selection, evaluation, and payroll processes. Efficient and effective management of "human capital" progressed to an increasingly imperative and complex process. The HR function consists of tracking existing employee data which traditionally includes personal histories, skills, capabilities, accomplishments and salary. To reduce the manual workload of these administrative activities, organizations began to electronically automate many of these processes by introducing specialized human resource management systems. Currently human resource management systems encompass: 1. 2. 3. 4. 5. 6. 7. 8. 9. 8.
Payroll Time and Attendance Performance appraisal Benefits administration HR Management Information System Recruiting/Learning management Employee self-service Absence management Analytics
REPORTING ENGINES
Banks acquire dedicated reporting engines to meet their reporting requirement. Due to the huge data volumes, banks don’t take risk for generation of reports on their production servers as it may result in performance issues which may hamper the customer service and eventually result in operations and reputational loss to the bank. Data from multiple systems can be combined in one Reporting Engine database. Reporting engines support development of complex reports using data extracted from different banking systems to meet Management and Financial reporting requirements including budgeting & forecasting, profitability analysis, product development analysis etc. Output of the data can be extracted in different report formats like pdf, excel, csv. Customized report layouts can be designed to have presentable analytical reports showing graphs and data etc.
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