I am trying to estimate a banking system. So if I consider use case diagram that is in the design phase.
Do I have to calculate the function points for each use-case activity or calculate function points for whole system as total inputs total outputs ? If I consider as a whole then how can I assign cost and resources for each separate activity in Project Estimation tool like MS Project.
You can do it any way you want, but software estimation is a field unto itself and there are some best practices it can be very helpful to follow. I found a good starting source is the book "Software Estimation: Demystifying the Black Art" by Steve McConnell.