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Overview of CBS

Core Banking Solution (CBS) refers to a common IT solution wherein a central shared database supports the entire banking application. The characteristics of CBS are:

  • There is a common database in a central server located at a Data Center.
  • CBS is centralized Banking Application software designed to meet the demands of the banking industry.
  • Branches function as delivery channels providing services to its customers.
  • In CBS brings a customer is a customer of the bank and not only of the branch.
  • CBS is modular in structure and is capable of being implemented in stages as per requirements of the bank.

Some examples of CBS software are:


  • Finn One
  • Flex cube
  • BaNCS
  • bankMate



In the case of a CBS, at the core is Central server. All key modules of banking are connected and related transactions are interfaced with the central server and are explained below:

  • Central Server: Initially, each branch had their local servers, and the data from the branch was sent in a batch to the servers in the data center only at the end of the day (EOD).

However, nowadays, most banks use CBS. This means that any deposits made in any branch are reflected immediately and customer can withdraw money from any other branch throughout the world.


  • Data Warehouse: Banking professionals use data warehouses to simplify and standardize the way they gather data - and finally get to one clear version of the truth.
  • Back Office: Administrative and support personnel, who does not interact with client. Back- office functions include clearances, record maintenance, regulatory compliance, accounting, and IT services.
  • Credit-Card System: Credit card system provides customer management, credit card management, provides the online transaction authorization and service of the bank card.
  • Automated Teller Machines (ATM): An Automated Teller Machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller.
  • Mobile Banking & Internet Banking: Mobile Banking and Internet banking are two sides of the same coin. The screens have changed. Mobile banking is a much latest entrant into the digital world of banking.
  • 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.
  • 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. The branch confines itself to the following key functions:
    • Creating manual documents capturing data required for input into software;
    • Initiating Beginning-Of-Day (BOD) operations;
    • End-Of-Day (EOD) operations; and
    • Reviewing reports for control and error correction.



The core features of CBS are as follows:

  • On-line real-time processing.
  • Transactions are posted immediately.
  • All databases updated simultaneously.
  • Centralized Operations (All transactions are stored in one common database/server).
  • Highly dependent system-based controls.
  • Centralized interest applications for all accounts and account types
  • Daily, half yearly and annual closing,
  • Anytime, anywhere access to customers and vendors.





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

  • Information flow: Facilitates information flow within the bank and Improves the speed and accuracy of decision-making.
  • Customer centric: holistic approach to provide good customer service.
  • Regulatory compliance: CBS has built-in and regularly updated regulatory platform which will ensure compliance.
  • Resource optimization: Optimizes utilization of information and resources of banks and lowers costs.



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.

The key technology components of CBS are as follows:

  • Database Environment
  • Application Environment
  • Data Centre and Disaster Recovery Centre
  • Web Environment
  • Security solution
  • Connectivity to the Corporate Network and the Internet
  • Network Solution architecture to provide total connectivity
  • Branch and Delivery channel environment

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