The Handbook of Banking Technology

Cover
Title Page
Copyright
Contents
Preface
CHAPTER 1 Introduction
	1.1 Banking and the Rise of Technology
	1.2 The Challenges of Technology in Large Banks
	1.3 Navigating This Book
	1.4 References
CHAPTER 2 The History and Current State of Banking
	2.1 A Brief History of Banking
	2.2 Cash, Gold and Digital Money
	2.3 Branch Centrism
	2.4 Banking Consolidation
		2.4.1 Consolidation in UK Banking
		2.4.2 Consolidation in Global Banking
		2.4.3 An Alternative Form of Consolidation
	2.5 The Development of Modern Banking Products and Services
		2.5.1 Banknotes
		2.5.2 Cheques
		2.5.3 Centralised Cheque Clearing
		2.5.4 Traveller's Cheques
		2.5.5 Wire Transfers and Electronic Payments
		2.5.6 Charge and Credit Cards
		2.5.7 Debit Cards
		2.5.8 Direct Debits
		2.5.9 Automated Teller Machines
		2.5.10 SWIFT
		2.5.11 Online and Internet Banking
		2.5.12 Telephone Banking
		2.5.13 Smartcards and Contactless Cards
		2.5.14 Stored Value and Prepaid Cards
		2.5.15 Mobile Banking
	2.6 Developments in Banking Technology
		2.6.1 Cheque‐sorting Machines
		2.6.2 Electronic Accounting Machines
		2.6.3 Computers
		2.6.4 Data Centres
		2.6.5 Data Networks
		2.6.6 Batch and Real‐time Processing
		2.6.7 Cloud
	2.7 The Challenges of Technology in Banking
	2.8 New Banking Models
		2.8.1 The UK Market as an Example
		2.8.2 North America
		2.8.3 Australia
		2.8.4 Europe
	2.9 The Impact of the 2008 Banking Crisis
	2.10 The Current State of Banking
		2.10.1 Banking Organisations
		2.10.2 Bank Networks and Payment Schemes
		2.10.3 Processors
		2.10.4 Technology in Banks
	2.11 Further Reading
	2.12 References
CHAPTER 3 An Introduction to Banking Technology
	3.1 Introduction
	3.2 A Model of a Simple Bank
	3.3 The Core Banking Platform
	3.4 Database Architectures
	3.5 Making Platforms Highly Available
	3.6 Platform Architectures
	3.7 Revisiting Our Simple Model of a Bank
	3.8 Single Customer View
	3.9 IBM CICS
	3.10 Internet Banking
	3.11 Customer Authentication
	3.12 Remote Procedure Calls
	3.13 Distributed Objects and CORBA
	3.14 Services
	3.15 Web Services
	3.16 RESTful Web Services
	3.17 Service‐Oriented Architecture
	3.18 An Updated Model of Our Bank
	3.19 Application Processing
	3.20 Microservices
	3.21 Modern Databases
	3.22 Data Analysis and Reporting
		3.22.1 Analytic Data Models
		3.22.2 Data Analysis Architectures
		3.22.3 Operational Data stores
		3.22.4 Big Data
		3.22.5 Operational Dashboards and Stream Processing
	3.23 Further Reading
	3.24 References
CHAPTER 4 Channels
	4.1 Introduction
	4.2 Branches
	4.3 Branch Technology
	4.4 Post
	4.5 Automated Teller Machines
		4.5.1 Basic Arrangement of a Bank's ATMs
		4.5.2 ATM Hardware, Software and Message Formats
		4.5.3 ATM Networks
		4.5.4 Considerations When Deploying ATMs
	4.6 Telephony
	4.7 Online Chat
	4.8 Video Calling
	4.9 Handling Telephone, Chat and Video Contacts
		4.9.1 The Call Centre Platform
		4.9.2 The Intelligent Network
		4.9.3 Handling a Call in the Call Centre
		4.9.4 Workforce Scheduling
		4.9.5 Computer Telephony Integration
		4.9.6 Interactive Voice Response
		4.9.7 Visual IVR
		4.9.8 Call Recording
		4.9.9 Diallers
		4.9.10 Modern Contact Centre Technology
		4.9.11 Session Initiation Protocol and Handling a VoIP Call
		4.9.12 Contact Recording with VoIP
		4.9.13 Computer Telephony Integration with VoIP Calls
		4.9.14 SIP Trunking and Contact Centre Platforms in the Cloud
		4.9.15 Other Contact Media Types
		4.9.16 A Modern Contact Centre
		4.9.17 H.323
		4.9.18 Contact Handling Considerations
	4.10 Text Messaging
	4.11 Internet
	4.12 Email
	4.13 Mobile
	4.14 Social Media
	4.15 Marketing
	4.16 Cross‐channel Considerations and Implications
		4.16.1 Consistency
		4.16.2 Operational Availability and Resilience
		4.16.3 Security
		4.16.4 Heterogeneity of Endpoints
		4.16.5 Accessibility
	4.17 References
CHAPTER 5 Banking Operations
	5.1 Contact Centre
	5.2 Payment Operations
	5.3 Cash Management
	5.4 Credit Operations
		5.4.1 Retail Credit Application Process
		5.4.2 Small Business Credit Application Process
	5.5 Collections and Recoveries
	5.6 Fraud Services
		5.6.1 Know Your Customer
		5.6.2 Politically Exposed Persons and Sanctioned Entities
		5.6.3 Adverse Media Checks
		5.6.4 Immigration Checklists
		5.6.5 Fraud Databases
		5.6.6 High‐Risk Countries
		5.6.7 Ongoing Monitoring
		5.6.8 Transaction Monitoring and Anti‐Money Laundering
		5.6.9 Reporting Suspicious Activity
		5.6.10 Tipping Off
	5.7 References
CHAPTER 6 Card Payments
	6.1 Types of Card
		6.1.1 Debit Cards
		6.1.2 Prepaid Cards
		6.1.3 Credit Cards
		6.1.4 Charge Cards
		6.1.5 Other Payment Cards
	6.2 Information on a Payment Card
	6.3 How a Card Payment Works
	6.4 Card Payment Networks
	6.5 Other Types of Card Transactions
		6.5.1 Pre‐authorisations
		6.5.2 Offline Payments
		6.5.3 Card‐Not‐Present Transactions
		6.5.4 PIN‐based Authorisation
		6.5.5 Reversals, Refunds and Chargebacks
		6.5.6 Advice Messages
	6.6 Managing Payment Cards
		6.6.1 Channels
		6.6.2 Onboarding and Issuance
		6.6.3 Processing
		6.6.4 Outsourcing of Processing
		6.6.5 Operational Management
		6.6.6 Back Office
	6.7 References
CHAPTER 7 Payments
	7.1 Introduction
	7.2 Cash
	7.3 Cheques
		7.3.1 Types of Cheques
		7.3.2 Clearing and Settlement of Cheques
		7.3.3 Cheque Fraud
		7.3.4 Considerations for Cheque Management in a New Bank
	7.4 Direct Credits
	7.5 Clearing and Settlement
	7.6 Interbank Payments
		7.6.1 Batch‐oriented Payment Schemes
		7.6.2 Example – Bacs Direct Credits
		7.6.3 Direct Debits
		7.6.4 Example – Bacs Direct Debits
		7.6.5 Message‐oriented Payment Schemes
		7.6.6 Payment Instructions
		7.6.7 Payment Message Formats
		7.6.8 Payment Message Addressing
		7.6.9 Other Payment Message Fields
		7.6.10 Example – Faster Payments
		7.6.11 High‐value Payment Schemes
		7.6.12 Example – CHAPS
		7.6.13 International Payments
		7.6.14 Options for Participating in Payment Schemes
		7.6.15 Hours of Operation
	7.7 Payment Fraud and Sanctions
	7.8 Payment Reconciliation
	7.9 Payment Technology
		7.9.1 Creating a Payment Instruction
		7.9.2 Processing Interbank Payments
		7.9.3 The Technology Underlying Payment Platforms
	7.10 References
CHAPTER 8 Regulation, Finance and Compliance
	8.1 Introduction
	8.2 Regulation
		8.2.1 PSD2
		8.2.2 General Data Protection Regulation
		8.2.3 Open Banking and Open Data
		8.2.4 Consequences of Non‐compliance
	8.3 Global Standards
	8.4 Working with (and within) Regulation
	8.5 Finance Functions – Introduction
	8.6 Finance
		8.6.1 Accounts Payable and Accounts Receivable
		8.6.2 Book‐keeping
		8.6.3 Tax
		8.6.4 Financial Planning and Budgeting
		8.6.5 Financial Reporting
		8.6.6 Regulatory Reporting
		8.6.7 Technology and Finance
	8.7 Treasury
		8.7.1 Risk Management and Modelling
		8.7.2 Asset and Liability Management
		8.7.3 Treasury Back Office
		8.7.4 Technology and Treasury
	8.8 Compliance
		8.8.1 History of Compliance
		8.8.2 Promulgation and Tracking of Compliance Objectives and Measures
		8.8.3 Creation of Standards and Tools for Managing Compliance Risk
		8.8.4 Training
		8.8.5 Assessment
		8.8.6 Root‐Cause Analysis and Enforcement
		8.8.7 Technology and Compliance
	8.9 Human Resources
	8.10 Procurement
	8.11 Other Corporate Functions
	8.12 References
CHAPTER 9 The Technology Function
	9.1 Organisation and Governance
	9.2 Conway's Law
	9.3 Cost of Technology
	9.4 Working with the Business – It's about the Service, Not the Technology
	9.5 Service Management
	9.6 Mapping Services to Applications
	9.7 Governing the Application Estate
	9.8 Insourcing and Outsourcing
	9.9 Managing the Estate
		9.9.1 The Importance of Standardisation and Order
		9.9.2 The ‘Agile’ Excuse
		9.9.3 Elements of Standardisation
		9.9.4 Non‐functional Capabilities
		9.9.5 Conclusion
	9.10 Following the Rules – Regulation, Law and Technology
		9.10.1 Regulation and Technology
		9.10.2 Law and Technology
		9.10.3 Industry Rules and Technology
		9.10.4 Regulation and Law – Conclusion
	9.11 References
CHAPTER 10 The Future of Banking
	10.1 Broad Trends
		10.1.1 The Payment Card Industry
		10.1.2 Banks
	10.2 Changing Products, Features and Functions
	10.3 The Future of Payments
		10.3.1 Instant Free Payments Anywhere
		10.3.2 Payment Anti‐fraud Measures
	10.4 Technology in Operations
	10.5 Regulation
	10.6 Finance
	10.7 The Technology Function
	10.8 A Short Digression on Data
	10.9 Banking Products and Services
		10.9.1 Current Accounts
		10.9.2 Loans
		10.9.3 Mortgages
	10.10 Distributed Ledger Technologies and Cryptocurrencies
		10.10.1 Payments
		10.10.2 Currencies
	10.11 The Future of the Branch
	10.12 Headcount, Skills and Career Progression in the Bank of the Future
	10.13 References
About the Authors
Index
EULA