These services are not only essential to customer confidence and financial stability. Still, they are also tightly regulated and dependent on multiple internal systems, national payment infrastructures, and third-party service providers. Any disruption to these services may result in significant financial, reputational, operational, and regulatory consequences.
This chapter provides a structured breakdown of CBS-2: Payments and Funds Transfer Services into its detailed sub-critical business services (Sub-CBS). By decomposing the high-level service into granular, process-level components, the Bank can better understand operational interdependencies, identify vulnerabilities, and define recovery priorities. This level of detail is crucial for strengthening operational resilience in alignment with regulatory requirements and global best practices.
The purpose of this chapter is to clearly map and document the underlying processes that collectively enable the delivery of Payments and Funds Transfer Services. By identifying each Sub-CBS, readers will gain clarity on how payment services function end-to-end—from initiation and authentication to clearing, settlement, reconciliation, and reporting. This structured visibility enables stakeholders to assess risk exposure, determine impact tolerances, prioritise recovery strategies, and strengthen governance over critical payment operations.
|
Sub-CBS Code |
Name of Sub-CBS |
Description of Sub-CBS |
|
2-01 |
Customer Payment Initiation |
End-to-end process enabling customers to initiate payments via online banking, mobile banking, branch counters, ATMs, or corporate channels, including transaction input, authentication, and validation. |
|
2-02 |
Funds Transfer Processing (Intra-bank) |
Processing of transfers between accounts within Bank Islam, including real-time balance validation, posting, and ledger updates. |
|
2-03 |
Interbank Transfer Processing (IBFT & RENTAS) |
Processing of outward and inward interbank transfers through national payment infrastructure such as IBFT and RENTAS, including routing, clearing, settlement, and reconciliation. |
|
2-04 |
DuitNow & Instant Payment Services |
Processing of instant transfers via DuitNow ID (mobile number, NRIC, business registration number), QR payments, and proxy resolution services. |
|
2-05 |
Payment Clearing & Settlement |
Clearing and settlement of outward and inward payment instructions with counterparties, ensuring timely posting and reconciliation with settlement accounts. |
|
2-06 |
Corporate & Bulk Payment Processing |
Processing of payroll, supplier payments, zakat payments, and other bulk transactions submitted via corporate banking platforms, including batch validation and file processing. |
|
2-07 |
Cross-Border Payment Processing |
Facilitation of foreign telegraphic transfers and remittances, including FX conversion, sanction screening, and SWIFT message processing. |
|
2-08 |
Payment Authorization & Authentication |
Multi-factor authentication, transaction signing, approval workflows, and Shariah-compliant controls for payment authorisation across retail and corporate channels. |
|
2-09 |
Sanctions Screening & AML Monitoring |
Real-time and post-transaction screening against sanctions lists, AML rules, fraud detection parameters, and regulatory compliance requirements. |
|
2-10 |
Transaction Posting & Core Banking Update |
Posting of debit and credit entries into the core banking system, updating customer balances, and maintaining accurate ledger integrity. |
|
2-11 |
Exception Handling & Reversal Management |
Handling failed transactions, rejected payments, disputes, refunds, reversals, and investigation processes to minimise customer impact. |
|
2-12 |
Reconciliation & Nostro/Vostro Management |
Daily reconciliation of payment records, suspense accounts, settlement accounts, and correspondent banking accounts to ensure financial accuracy. |
|
2-13 |
Customer Notification & Confirmation |
Automated SMS, email, and in-app notifications confirming transaction status, including alerts for successful, pending, or failed transactions. |
|
2-14 |
Payment Reporting & Regulatory Submission |
Generation of internal MIS reports, operational dashboards, and regulatory submissions to Bank Negara Malaysia relating to payment activities. |
|
2-15 |
Payment Channel Availability & Infrastructure Support |
Maintenance of supporting IT infrastructure, network connectivity, system interfaces, and third-party integrations to ensure high availability of payment services. |
Breaking down CBS-2 into its detailed Sub-CBS components transforms operational resilience from a conceptual objective into a practical management framework. By understanding how each process contributes to the continuity of payment services, the Bank is better positioned to anticipate disruptions, isolate failure points, and activate targeted response and recovery measures. This structured decomposition also supports clearer accountability across business, operations, compliance, and technology functions.
Ultimately, resilience in payments is not achieved solely through system redundancy or contingency planning, but through deep process understanding and proactive risk management. With this detailed Sub-CBS foundation, Bank Islam can confidently advance toward defining impact tolerances, mapping dependencies, conducting scenario testing, and strengthening its ability to maintain uninterrupted payment services—even in the face of severe but plausible disruptions.
|
Implementing Operational Resilience for Bank Islam: Aligning with BNM and Global Best Practices |
|||||
| eBook 3: Starting Your OR Implementation |
|||||
| CBS-2 Payments and Funds Transfer Services | |||||
| CBS-2 DP | CBS-2 MD | CBS-2 MPR | CBS-2 ITo | CBS-2 SuPS | CBS-2 ST |
To learn more about the course and schedule, click the buttons below for the OR-300 Operational Resilience Implementer course and the OR-5000 Operational Resilience Expert Implementer course.
|
If you have any questions, click to contact us. |
||
|
|