Banking Product Engines

Banks offer a variety of products each of which requires a combination of back office staff and complex computer systems to set up and maintain. It is these systems, staff and processes that we refer to here as 'Engines'.

We have identified eight key banking engines that are referred to on this site.

1. Core Banking
2. Insurance
3. Asset Finance
4. Capital Markets
5. Fund Management
6. Cards
7. Mortgages
8. Stock Broking

Further details about each of these product engines can be found in the Enginebs section of the Banking Framework Scope page.

Howbankswork.com presents reports and articles on themes relevant to Banking Operations. To help you find information easily we have listed below all the reports and articles that relate to the banking engines described above.

Related Articles

This article describes how Investment and Retail Banks are connected.

This article describes how a separation might be achieved in systems and operations terms to support the Independent Banking Commission’s recent reforms and the Financial Stability Boards’ “Living Wills” requirements.

This article discusses banking disintegration, focussing on the various complexities arising from the partial divestment of RBS branches to the Santander Group. The specific problems of divestment might spawn a new IT service industry.

Read on to find out more about banking disintegration.

UK Banks are under increasing pressure from a range of external stakeholders to clarify the real value and nature of their assets. There are many aspects of banking and its operations that complicate a Bank’s reaction to this pressure.

Read on to find out about the the way in which the Banks have reacted so far, as well as the core issues and solution...

This article covers what has happened to Interbank markets over the last 6 months, why this has happened and the expected impact on IT and Operations.

There are two main areas of change as a result of the credit crunch for IT and Operations;

• Stop / Run down programmes
• New MI based on Capital

These are discussed further in the article.

This Appendix highlights why Banks lend to each other and the three means that are used;

• Money Market Loan and Deposits
• Syndicated Loans and Loan Markets
• Securitisation and CDOs

These mechanisms, whist technically independent are not completely so. If for some reason banks are unwilling to lend to a particular banking organisation it is probably because they do not believe that organisation’s loans to its customers are very good. Hence trying to sell these loans via Syndicated Lending or Securitisation may not be fruitful either.

This article describes at a high level how an Investment bank works from a systems and operations point of view. It is by necessity a simplification of reality but conveys the essence of the game. We break the article down into two parts.

• The Core Trading Business Model
• The Investment Bank Structural Overlay

It is by necessity a simplification of reality but conveys the essence of the game. There are two parts to this; The Core Trading Business Model & The Investment Bank Structural Overlay.

We will neither discuss the separation nor the Fortis & Santander projects further. We will focus on the RBS Integration project and its 3 stages;

• Part A - Risk Management
• Part B - Migration or Integration of Products
• Part C - The End State

The ABN Amro takeover by the consortium of banks consisting of Royal Bank of Scotland (RBS); Fortis and Santander has resulted in four projects. This article sets the scene by introducing the four migration projects resulting from the takeover of ABN Amro; the ABN Amro Separation project, the RBS Integration project, and the Fortis and Santander Integration projects. However, the article will only address the aspects of the RBS ABN Amro projects.

The Government has announced changes that have to be made by end 2007 to the cheque clearing system. We believe these changes will hit the smaller banks and building societies hardest but the Government may force the Clearing Banks to “help” these institutions out. More of a problem is the sheer do-ability of the changes for these smaller banks and building societies, given that the changes co-incide in time with the arrival of Faster Payments (see our sister web site www.fastpayments.co.uk for more details) and the Single European Payments Area (SEPA) – see our article on SEPA for more details.

Under what is called the SEPA Cards Framework (SCF) there is a drive to standardise the interface between Merchants and Merchant Acquirer (click here for an explanation of what a merchant acquirer is).

IT is full of complexity particularly around IT Security. Therefore, describing the IT security environment of a bank becomes quite challenging especially when trying to communicate to various people such as analysts and business programme managers who have to face off to the IT professionals on the AIP security programme. This article explores this gap and describes the IT security environment of a bank which is understandable to business programme managers, analysts and IT professionals by explaining why the IT security world is the way it is and where it is likely to head

This article consists of two parts, the first gives historical description of why the IT security world is the way it is. The second part then goes on to make a forecast about the likely changes to be introduced.

Most people understand the ideas behind retail bank lending (such as house mortgages or overdrafts) from personal experience. The currently booming world of syndicated lending and loan markets is much more opaque. The purpose of this paper is to open this up. It explains how it works and some of the trends taking place; in particular why banks are currently investing in IT projects in the back offices of their syndicated loans departments

Howbankswork.com looks at the new industry driven real time payments for internet banking, telephone banking and standing orders and how it will cause banks’ IT departments to re-engineer their core banking systems. This will be a major area of systems development over the next few years and this article describes the impacts by systems area.

This report provides a detailed examination of the key strategies and technologies currently being pursued in UK Banking Operations departments. The report highlights some key strategies that are affecting banking engines including centralising processing, outsourcing and the separation of service and processing.

This report specifically examines recent strategies and technologies in relation to the Core Banking engine and assesses success / failure.

This report examines what factors make for a successful outsourcing arrangement and what conditions / factors are likely to be detrimental.

This report outlines how mobile payments are working and/or are likely to work, relative to Person to Person and Person to Merchant payments.

This report outlines the reasons why a bank could want to invest in the mobile payment technology.

This report maps the changes in banking systems over the past fifty years combined with the introduction of new technologies within the bank over that period

With Europe's hundreds of banks collectively knit together, one would expect the European Payments system to be fundamentally efficient. However, this is not the case.Our report investigates why this is the case and considers how cost savings can be made, paving the way for substantial economic growth.

Business users often consider their Bank's systems to be hugely expensive and highly inflexible to change. This article argues that this perception is in part a product of undervaluing the core systems. A 'Value Model' is provided to help you realise the true value of your Bank's systems

Boston Consulting Group's thought-provoking article on the march offshore, particularly to India, assesses why it makes good business sense for financial institutions to outsource overseas.

Related Links

The links below provide further information relevant to Banking channels.