Core Banking Solution Transformation is the key to the Bank of the Future
Core banking solutions are the backbone of banking operations, the central element that orchestrates all transactions and services.
Digital transformation is changing the banking industry, but often banks have postponed core banking system renewal projects. Although these systems, in many cases, are also decades old.
Core banking is literally the beating heart of the bank, and projects to replace it therefore require time and money. Today, however, technological innovation is leading banks to consider a new generation of core bank solutions.
What is core banking?
The term Core Banking refers to the central system that allows banks to offer services to customers through branches and various channels. It manages all the basic functions: account opening, deposits, withdrawals, loans, payment processing, customer relationship management.
The New Generation of Core Banking
Traditional core banking platforms are typically proprietary software, created decades ago to meet the needs of banks radically different from today's.
Modifying and updating legacy systems requires ad hoc, manual interventions to add the necessary code. It's not trivial to find programmers who know languages like Cobol, which are now considered outdated.
The new needs of banks, which are looking at the digitization of product and service offerings, require flexibility and agility to reduce time to market and maintain customer centricity.
Technologies Changing Core Banking
The drive to transform core banking comes from various technological trends.
Cloud computing promises a more efficient, scalable, and secure infrastructure, making cloud-based core banking solutions easier to integrate with new financial applications.
Artificial intelligence and machine learning are indispensable elements in the future of banks, to enhance customer relationship services, fraud detection, creditworthiness analysis, and much more.
APIs are also establishing themselves as a standard for data sharing with third parties, also driven by regulatory pressure towards open banking.
The mobile device boom, finally, is an additional challenge for core banking systems. Software written decades ago was designed for a branch-centric bank, to which the ATM was added over time to withdraw money and perform basic operations.
Today the bank is omnichannel and must offer the same level of service on all channels, physical and digital, including those that have yet to arrive, such as the metaverse or virtual reality. Digital core banking must be natively oriented towards this omnichannel approach.
Core Banking Solutions on topVendors
On topVendors, you can find various core banking platforms offered by the best companies in the market, among these:
- Cedacri Core Banking
- Plat@one by Enterprise
- Qinetic by Quid
Which banks are renewing core banking
In June 2024, Eurobank Cyprus, the third-largest bank on the island, chose Temenos to modernize its core and digital banking systems: there is a plan to replace 85% of legacy systems.
In the same month, Ugandan Centenary Bank signed an agreement with Oracle Financial Services for a number of solutions, including the Flexcube core banking system.
In April 2024, the main Italian bank, Intesa Sanpaolo, instead selected Qinetic by Quid to manage the credit processes of the Group's digital bank, Izybank.
In February 2024, Segura Bank International (we are in Puerto Rico) picked Temenos's cloud-based core banking.