CBS (Core Banking System) mode of Operation: :
- Core banking solutions is jargon used in banking circles. The advancement in technology, especially Internet and information technology has led to new ways of doing business in banking. These technologies have reduced manual work in banks and increasing efficiency. 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 developed to perform core operations of banking like recording of transactions, passbook maintenance, interest calculations on loans and deposits, customer records, balance of payments and withdrawal. This software is installed at different branches of bank and then interconnected by means of computer networks based on telephones, satellite and the internet. It allows the banks customers to operate accounts from any branch if it has installed core banking solutions.
- Gartner defines a core banking system as a back-end system that processes daily banking transactions, and posts updates to accounts and other financial records. Core banking systems typically include deposit, loan and credit-processing capabilities, with interfaces to general ledger systems and reporting tools. Core banking applications are often one of the largest single expense for banks and legacy software are a major issue in terms of allocating resources. Strategic spending on these systems is based on a combination of service-oriented architecture and supporting technologies that create extensible architectures.
- Core banking is defined as the sum of all IT-components that enable banks to manage their basic financial products and services (such as account and client data, investments, credits, mortgages, payments and cards transactions).