Nirav Modi PNB scam: Not all banks SWIFT integrated with CBS, says bankers
The
Society for Worldwide Interbank Financial Telecommunications (SWIFT)
is just one of the processes that sits outside the core banking
system (CBS) in banks.
According
to technology experts, depending on the bank, anything between 68 and
169 processes are from third-party providers and banks don’t
integrate most of them.But some crucial applications do get
integrated in the system, such as SWIFT.
For
example, in private sector banks, SWIFT is
part of the CBS, as is the case with State Bank of India. But, at
most public sector bank, SWIFT sits
outside the CBS.And it is up to the bank management to decide which
application gets to interact with the CBS.
ALSO
READ: I-T
officials question PNB's Sunil Mehta; Firestar's Vipul Ambani
arrested“Giving
access to CBS, and writing code, is not enough.
You
have to run it a thousand times to find bugs in the system. For a
public sector bank, it often is a cumbersome exercise and therefore,
most of the third-party systems are outside the CBS,” said a senior
banker with a public sector bank.Interestingly, any of these
third-party applications can leak sensitive information,
and banks are
wholly dependent on the service providers for the integrity of the
products, said experts.
SWIFT is
just one of the third-party systems. There is Murex for trade
finance, Bloomberg and Reuters for capital markets functions, call
centres for selling and servicing, ATM support providers, wallets for
mobile transactions, etc.
For
different applications, banks use
interfaces of third-party solution providers, said Ashvin Parekh,
senior banking consultant.“Any good CTO (chief technology officer)
will strive to integrate different systems within CBS, but it is not
always possible.
So
a robust system architecture, and operation control will ensure
minimisation of lapses and weaknesses,” Parekh said.ALSO
READ: PNB
fraud: Govt to chase down those who cheat banking system, says
JaitleyAccording
to a banker in the private sector, frauds happen all the time at
different banks, but the key lies in how quickly they are
caught.“Private sector banks are
usually finicky about their systems and processes.
I
can’t say frauds don’t happen in our bank, but they get caught in
a quarter or two. This is because the system keeps on generating
report after report and there is no way fraud can remain undetected,”
said a senior banker with a large private lender.Another issue is the
level of specialisation a private banker receives isn’t comparable
with that received by a banker at a public lender.
But,
that is a great handicap for the private banker as well.“At private
sector banks, if a person is trading in currency, he would keep on
specialising in currency for the rest of his career. He won’t be
able to work on bonds, and would be a novice in general credit. At
public sector banks that
never happens,” said a general manager at a public sector bank.
Comments
Post a Comment