Banking Expert

Expert guidance for banking systems, core banking platforms, regulatory compliance, and banking technology.

Core Concepts

Banking Systems

Core banking systems (CBS)
Account management
Transaction processing
Payment systems (ACH, SWIFT, SEPA)
Loan management
Risk management systems

Regulations

Basel III/IV capital requirements
Know Your Customer (KYC)
Anti-Money Laundering (AML)
GDPR for banking
PSD2 (Payment Services Directive)
Dodd-Frank Act

Key Technologies

Real-time payment processing
Mobile banking
Open banking APIs
Digital wallets
Blockchain in banking
AI for fraud detection

Account Management

from decimal import Decimal
from datetime import datetime
from enum import Enum

class AccountType(Enum):
    CHECKING = "checking"
    SAVINGS = "savings"
    CREDIT = "credit"
    LOAN = "loan"

class Account:
    def __init__(self, account_number: str, account_type: AccountType,
                 customer_id: str, balance: Decimal = Decimal('0')):
        self.account_number = account_number
        self.type = account_type
        self.customer_id = customer_id
        self.balance = balance
        self.status = "ACTIVE"
        self.created_at = datetime.now()

    def deposit(self, amount: Decimal) -> dict:
        """Deposit funds with validation"""
        if amount <= 0:
            raise ValueError("Amount must be positive")

        self.balance += amount

        return {
            "transaction_id": self.generate_transaction_id(),
            "type": "DEPOSIT",
            "amount": amount,
            "balance": self.balance,
            "timestamp": datetime.now()
        }

    def withdraw(self, amount: Decimal) -> dict:
        """Withdraw funds with balance check"""
        if amount <= 0:
            raise ValueError("Amount must be positive")

        if self.balance < amount:
            raise ValueError("Insufficient funds")

        self.balance -= amount

        return {
            "transaction_id": self.generate_transaction_id(),
            "type": "WITHDRAWAL",
            "amount": amount,
            "balance": self.balance,
            "timestamp": datetime.now()
        }

    def transfer(self, to_account: 'Account', amount: Decimal) -> dict:
        """Transfer funds between accounts"""
        # Withdraw from source
        withdrawal = self.withdraw(amount)

        try:
            # Deposit to destination
            deposit = to_account.deposit(amount)

            return {
                "transaction_id": self.generate_transaction_id(),
                "type": "TRANSFER",
                "from_account": self.account_number,
                "to_account": to_account.account_number,
                "amount": amount,
                "timestamp": datetime.now()
            }
        except Exception as e:
            # Rollback on failure
            self.deposit(amount)
            raise e

KYC/AML Compliance

class KYCService:
    def verify_customer(self, customer_data: dict) -> dict:
        """Perform KYC verification"""
        verification_results = {
            "identity_verified": False,
            "address_verified": False,
            "sanctions_clear": False,
            "pep_check_clear": False,
            "risk_level": "HIGH"
        }

        # Identity verification
        verification_results["identity_verified"] = self.verify_identity(
            customer_data["id_document"]
        )

        # Address verification
        verification_results["address_verified"] = self.verify_address(
            customer_data["proof_of_address"]
        )

        # Sanctions screening
        verification_results["sanctions_clear"] = self.screen_sanctions(
            customer_data["name"],
            customer_data["date_of_birth"]
        )

        # PEP (Politically Exposed Person) check
        verification_results["pep_check_clear"] = self.check_pep(
            customer_data["name"]
        )

        # Calculate risk level
        verification_results["risk_level"] = self.calculate_risk_level(
            verification_results
        )

        return verification_results

class AMLMonitoring:
    def monitor_transaction(self, transaction: dict) -> dict:
        """Monitor transaction for suspicious activity"""
        flags = []

        # Large transaction
        if transaction["amount"] > 10000:
            flags.append("LARGE_TRANSACTION")

        # Rapid succession of transactions
        if self.check_velocity(transaction["account_id"]):
            flags.append("HIGH_VELOCITY")

        # Unusual pattern
        if self.check_pattern(transaction):
            flags.append("UNUSUAL_PATTERN")

        # International transfer to high-risk country
        if transaction.get("international") and \
           self.is_high_risk_country(transaction.get("destination")):
            flags.append("HIGH_RISK_COUNTRY")

        if flags:
            self.file_suspicious_activity_report(transaction, flags)

        return {
            "flagged": len(flags) > 0,
            "flags": flags,
            "risk_score": self.calculate_aml_risk_score(flags)
        }

Payment Processing

class PaymentProcessor:
    def process_ach_payment(self, payment: dict) -> dict:
        """Process ACH payment"""
        # Validate routing and account numbers
        if not self.validate_routing_number(payment["routing_number"]):
            raise ValueError("Invalid routing number")

        # Create ACH file
        ach_batch = self.create_ach_batch([payment])

        # Submit to ACH network
        submission_result = self.submit_to_ach_network(ach_batch)

        return {
            "payment_id": payment["id"],
            "status": "PENDING",
            "expected_settlement": self.calculate_settlement_date(),
            "trace_number": submission_result["trace_number"]
        }

    def process_wire_transfer(self, wire: dict) -> dict:
        """Process SWIFT wire transfer"""
        # Generate SWIFT message
        swift_message = self.create_swift_mt103(wire)

        # Send via SWIFT network
        result = self.send_swift_message(swift_message)

        return {
            "wire_id": wire["id"],
            "status": "SENT",
            "swift_reference": result["reference"],
            "fee": self.calculate_wire_fee(wire["amount"])
        }

Interest Calculation

class InterestCalculator:
    @staticmethod
    def calculate_simple_interest(principal: Decimal, rate: Decimal,
                                  days: int) -> Decimal:
        """Calculate simple interest"""
        return principal * rate * days / 365

    @staticmethod
    def calculate_compound_interest(principal: Decimal, annual_rate: Decimal,
                                   years: int, compounds_per_year: int = 12) -> Decimal:
        """Calculate compound interest"""
        rate_per_period = annual_rate / compounds_per_year
        num_periods = years * compounds_per_year

        return principal * ((1 + rate_per_period) ** num_periods - 1)

    @staticmethod
    def calculate_loan_payment(principal: Decimal, annual_rate: Decimal,
                              months: int) -> Decimal:
        """Calculate monthly loan payment"""
        monthly_rate = annual_rate / 12

        payment = principal * (monthly_rate * (1 + monthly_rate) ** months) / \
                  ((1 + monthly_rate) ** months - 1)

        return payment.quantize(Decimal('0.01'))

Best Practices

Implement two-factor authentication
Use encryption for sensitive data (at rest and in transit)
Maintain complete audit trails
Implement real-time fraud detection
Ensure ACID compliance for transactions
Regular security audits and penetration testing
Implement rate limiting on APIs
Use tokenization for sensitive data
Maintain disaster recovery and business continuity plans
Regular regulatory compliance reviews

Anti-Patterns

❌ Storing sensitive data unencrypted ❌ No transaction logging/audit trail ❌ Synchronous payment processing ❌ Ignoring regulatory compliance ❌ No fraud detection mechanisms ❌ Using floats for money calculations ❌ No backup and recovery procedures

Resources

Basel Committee: https://www.bis.org/bcbs/
SWIFT Standards: https://www.swift.com/standards
PSD2: https://ec.europa.eu/info/law/payment-services-psd-2
FFIEC: https://www.ffiec.gov/

banking-expert