Module II – APPLICATIONS IN BANKING

Centralized Banking System/ Core Banking System

CORE (Centralized Online Real-time Exchange) banking is a banking service provided by a group
of networked bank branches where customers may access their bank accounts and perform basic
transactions from any of the member branch offices.
Advancements in Internet and information technology reduced manual work in banks. 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.
Banking software and network technology allows a bank to centralize its record keeping and allow
access from any location.
Many banks implement custom applications for core banking. Systems integrators
like Cognizant, Capgemini, Accenture, IBM and Tata Consultancy Services implement these core
banking packages at banks.

Advantages of Core Banking

A core banking system, when implemented well, ensures accurate and error-free delivery of
financial services to customers, thus adding to the banks’ efficiency and performance.
Some of the most positive impacts of deploying CBS (Core Banking Solutions) in banks:
 Makes the internal staff more competent.
 Minimizes human intervention thereby limiting errors.
 Helps prevent frauds and thefts with real-time banking facilities.
 Reduces operational costs.
 Aids in studying changing customer demands.
 Facilitates decision making through reporting and analytics.

System Administration
System administration refers to the management of one or more hardware and software systems.
It is a field of work in which someone manages one or more systems, be the software, hardware,
servers or workstations. System administration ensures the systems are running efficiently and
effectively.

System Administrator
A person who is responsible for setting up and maintaining the system or server.

System Administrator is responsible for:

 User administration(setup and maintaining account).
 Maintaining system.
 Verify that peripherals are working properly.
 Quickly arrange repair for hardware in occasion of hardware failure.
 Monitor system performance.
  Create file systems.
 Install software.
 Create a backup and recovery policy.
 Monitor network communication.
 Update system as soon as new version of OS and application software comes out.
 Implement the policies for the use of the computer system and network.
 Setup security policies for users.
 Password and identity management.

Database Administration
Database Administration is the function of managing and maintaining DBMS software such as
Oracle, IBM DB2 and Microsoft SQL Server.

Database Administrator
A database administrator (DBA) is a specialized
computer system administrator who maintains a
successful database environment by directing or
performing all related activities to keep the data
secure. The top responsibility of a DBA is to maintain
data integrity.A DBA is charged with the creation,
maintenance, backups, querying, tuning, user rights
assignment and security of an organization's databases.

Types of DBA

Administrative DBA – maintains the servers and databases and keeps them running. Concerned
with backups, security, patches and replication. The administrative DBA maintains the database
and software platform, but is not involved in enhancing or developing it.

Development DBA - works on building SQL(Structured Query Language) queries, stored

procedures, and so on, that meet business needs. This is equivalent to a programmer, but
specializing in database development. Commonly combines the role of Administrative DBA.

Data Architect – designs schemas, builds table’s indexes, data structures and relationships. This
role works to build a structure that meets a general business needs in a particular area. For instance,
a software company will use data architects to build a design for the database of a new commercial
application system for running a bank's operations. The design is then used by developers and
development DBAs to implement the actual application.

Data Warehouse DBA - this is a relatively newer role, responsible for merging data from multiple
sources into a data warehouse. It is necessary to design the data warehouse and also to clean up
and standardize the data before loading the data. This is the activity performed by a Data
warehouse DBA.
Database Management System ( DBMS )

A database management system (DBMS) is system software for creating and managing databases.
The DBMS provides users and programmers with a systematic way to create, retrieve, update and
manage data. A DBMS makes it possible for end users to create, read, update and delete data in a
database.

DBMS allows users to perform the following tasks:

 Data Definition: It is used for creation, modification and removal of definition that
defines the organization of data in the database.
 Data Updation: It is used for the insertion, modification, and deletion of the actual data
in the database.
 Data Retrieval: It is used to retrieve the data from the database which can be used by
applications for various purposes.
 User Administration: It is used for registering and monitoring users, maintain data
integrity, enforcing data security, dealing with concurrency control, monitoring
performance and recovering information corrupted by unexpected failure.

Server :
A server is a computer that provides data to other computers. It may serve data to systems on a
local area network (LAN) or a wide area network (WAN) over the Internet. Servers usually have
more processing power, memory and storage than client computers.
Types of server
 Proxy Server
 Mail Server
 FTP Server
 Web Server
 Application Server

Application Server
An Application Server also called as an appserver, is a software framework that provides both
facilities to create web applications and a server environment to run them. It handles all
application operations between the users and an organizations backend business applications
or databases.
Application Administration

 Protects sensitive application data.

 Prevents unauthorized users from accessing sensitive data such as financial records or
personally identifiable information.
 Restricts who can assign application specific roles such as the administrator and designated
developers for the application.
 Prevents users with the system level admin role from assigning themselves a protected
application role.
 Assigning themselves to group containing a protected application role.
 Bypassing existing access controls to a protected application by creating new access
controls.
 Inheriting a protected application role.
 Overriding existing access controls to a protected application.

Application Administrator
 Application administrators install, update, tune, diagnose and take care of both internal and
third party applications.
 They are not developers and users, but they are critical to keeping the applications the
organization relies on running.
 The applications they support includes :
o ERP( Enterprise Resource Planning)
o CRM(Customer Relationship Management)
o POS(Point of Sale)
o BPM( Business Process Management)
o Budgeting and forecasting
o HR(Human Resources)
o Legal matter management
o AP(Accounts Payable) / AR(Accounts Receivable)
o Payroll
o General Ledger

Network Administration
Network administration involves a wide range of operational tasks that help a network to run
smoothly and efficiently. The tasks performed are:
  Design, installation and evaluation of the network.
 Execution and administration of regular backups.
 Creation of precise technical documentation such as network diagrams, network cabling
documents etc.
 Provision for precise authentication to access network resources.
 Provision for troubleshooting assistance.
 Administration of network security including intrusion detection.

Network Administrator
A network administrator is an IT expert who manages an organization's network. The network
administrator must possess a high level of technological knowledge and is most commonly the
highest level of technical staff within an organization. Network administrators keep networks
operational and monitor functions and operations within the network.
A network administrator is responsible for installing, maintaining and upgrading any
software or hardware required to efficiently run a computer network. The IT or computer
network may extend to a local area network, wide area network, the internet and intranets.
Network Administrator is responsible for:
 Installing network and computer system.
 Maintaining, repairing and upgrading network and computer systems.
 Diagnosing and fixing problems or potential problems with the network and its
hardware, software and systems.
 Monitoring network and systems to improve performance.

Domains

 Domain name is a way to identify and locate computers connected to the internet.
 No two organizations can have same domain name.
 A domain name always consists of two or more components separated by
 period called dot(.)
EXAMPLE: www.yahoo.co.in, www.facebook.com etc.
 Once a domain has been established sub domains can be created within the domain
EXAMPLE: The domain for the large company could be “Vni.com” and within this
domain ,subdomains can be created for each of the company’s regional office.
Eg: Delhi.vni.com
 Each domain name has a corresponding IP address
 When the user types the domain name in the address bar, the corresponding IP address is
supplied. Such a translation is possible with the help of system called DNS (DOMAIN
NAME SYSTEM)

“DOMAIN NAME SYSTEM is a collection of the databases that contain information about
domain names and their corresponding IP address.”
IP Address
IP address is a unique logical address assigned to a machine over the network. An IP address
exhibits the following properties:
 IP address is the unique address assigned to each host present on Internet.
 IP address is 32 bits (4 bytes) long.
 IP address consists of two components: network component and host component.
 Each of the 4 bytes is represented by a number from 0 to 255, separated with dots. For
example 137.170.4.124
IP address is 32-bit number while on the other hand domain names are easy to remember names.
For example, when we enter an email address we always enter a symbolic string such as
[email protected].
The Domain name system comprises of Domain Names, Domain Name Space, Name Server .
Domain Names
Domain Name is a symbolic string associated with an IP address. There are several domain names
available; some of them are generic such as com, edu, gov, net etc, while some country level
domain names such as au, in, us etc.

Domain Name Space

Top level domains are classified into 3 categories:
 Organizational or generic domains
 Geographical or country domains
 Reverse domains

The following table shows the Generic Top-Level Domain names:

Domain Name Meaning
Com Commercial business

edu Education
gov U.S. government agency
int International entity
mil U.S. military
net Networking organization
org Non profit organization

The following table shows few of the Country top-level domain names:
Domain Name Meaning
au Australia
in India
us United States
uk United Kingdom
jp Japan
es Spain
hk Hong kong
Uniform Resource Locator (URL) refers to a web address which uniquely identifies a document
over the internet. This document can be a web page, image, audio, video or anything else present
on the web.
For example, www.yahoo.com/internet_technology/index.html is a URL to the index.html
which is stored on yahoo web server under internet technology directory.

Data Downloads/ Uploads

In computer networks, download is to receive data from a remote system, typically a server such
as a web server, an FTP server, an email server, or other similar systems. Examples include
opening a web page, receiving email, purchasing music files and watching online videos.

Uploading means data is being sent from your computer to the Internet. Examples of
uploading include sending email, posting photos on a social media site and using your webcam.

Bandwidth

Bandwidth describes the maximum data transfer rate of a network or Internet connection. It
measures how much data can be sent over a specific connection in a given amount of time. For
example, a gigabit Ethernet connection has a bandwidth of 1,000 Mbps, (125 megabytes per
second). Bandwidth is measured in bits per second.

Data Center
A data center is a facility that centralizes an organization's IT operations and equipment, as well
as where it stores, manages, and disseminates its data. Data centers house a network's most critical
systems and are vital to the continuity of daily operations. In centralized online banking, a bank
has a Data Center(DC) that stores and provides information of a bank necessary to run the business.
A data center is a facility used to house computer systems and associated components such as
telecommunications and storage systems. It generally includes redundant or backup power
supplies, redundant data communication connections, environmental control and security devices.

Elements of data center

 Facility
 Support Infrastructure
o Uninterruptible Power Sources (UPS)
o Environmental Control – computer room air conditioners (CRAC)
o Physical Security Systems – biometrics and video surveillance systems
 IT equipment
 Operations staff
Data Storage Devices

A storage device is any computing hardware that is used for storing, porting and
extracting data files and objects. It can hold and store information both temporarily and
permanently, and can be internal or external to a computer, server or any similar computing device.

Types of data storage devices/mediums

These include RAM or main memory; magnetic tape and magnetic disk; optical disc, such as
CDs and DVDs ; flash memory and various iterations of in-memory storage.

Random Access Memory (RAM)

RAM is the internal memory of the computer for storing data, program instructions and the
results generated. Data in the RAM can be accessed randomly as the RAM chip is made of metal
oxide semiconductor. Hence called as Random Access Memory. It is also called as read/write
memory as it permits both read and write operations. RAM is volatile, i.e. data stored in it is
lost when we switch off the computer or if there is a power failure. Hence a backup
uninterruptible power system (UPS) is often used with computers. RAM is small, both in terms
of its physical size and in the amount of data it can hold.

Hard Disk
A hard disk is part of a unit -- often called a disk drive, hard drive or hard disk drive -- that stores
and provides relatively quick access to large amounts of data. Hard disk drive (HDD) is a non-
volatile computer storage device containing magnetic disks or platters rotating at high speeds. It is
a secondary storage device used to store data permanently. Today's computers typically come with
a hard disk that can contain anywhere from billions to trillions of bytes of storage.

Optical Storage
Optical storage is the storage of data on an optically readable medium. An optical disc drive is a
device in a computer that can read CD-ROMs or other optical discs, such as DVDs and Blu-
ray discs. These disks are generally used to:
 Distribute software to customers
 Store large amounts of data.
 Transfer data to different computers or devices
 Back up data from a local machine

Flash memory
Flash memory is a non-volatile memory chip used for storage and for transferring data between a
personal computer (PC) and digital devices. It has the ability to be electronically reprogrammed
and erased. It is often found in USB flash drives, MP3 players, digital cameras and solid-state
drives.
Secure Digital Card (SD Card)
A Secure Digital card (SD card) is a non-volatile form of flash memory for portable and mobile
devices. SD cards provide large-capacity storage in a tiny package with very low power draw,
which is crucial because SD cards are often used in battery powered devices.

Data Backups/ Restoration

Backup and recovery refers to the process of backing up data in case of a loss and setting up
systems that allow the data recovery due to data loss. Backing up data requires copying and
archiving computer data, so that it is accessible in case of data deletion or corruption.

Data restore is the process of copying backup data from secondary storage and restoring it to its
original location or a new location. A restore is performed to return data that has been lost, stolen
or damaged to its original condition or to move data to a new location.

Different types of data backup:

Full backup
In the full backup every single file and folder in the system is backed up. A full backup takes
longer and requires more space than other types of backups but the process of restoring lost data
from backup is much faster.

Incremental backup
With incremental backup, only the initial backup is a full one. Subsequent backups only stores
changes that were made since the previous backup. The process of restoring lost data from backup
is longer but the backup process is much quicker.

Differential backup
Differential backup is similar to incremental backup. With both, the initial backup is full and
subsequent backups only store changes made to files since the last backup. This type of backup
requires more storage space than incremental backup does, however, but it also allows for a faster
restore time.

Mirror backup
A mirror backup, as the name implies, is when an exact copy is made of the source data. The
advantage of mirror backup as opposed to full, incremental, or differential backups is that you’re
not storing old files. When old files are deleted, they disappear from the mirror backup as well
when the system backs up. The downside to mirror backup is that if files are accidentally deleted,
they can be lost from the backup.