What is Core Banking?
In the simplest form, core (centralized online real-time exchange) banking is the system and software used to support a bank’s financial transactions such as deposits, loans, mortgages and payments, which helps the bank balance its general ledger, which is a recordkeeping system used to sort, store and summarize a company’s financial transactions. Core banking services are available to the bank employees and the bank customers across multiple channels like ATMs, Debit Cards, Online Banking, Mobile Banking and branches. The goal of core banking solutions is to make the interactions seamless for the customer and efficient and cost-effective for banking institutions.
Core banking provides financial institutions information technology (IT) solutions for most banking functions. You log in to your online bank account, core banking is behind that; you deposit a check at your local branch, core banking is behind that; you pay your monthly mortgage payment, core banking is behind that. Core banking is at the core of what banks do and the products and services they offer to their customers. So, it’s easy to see that core banking plays a vital role in the performance of financial institutions.
Core Banking Background
In its earliest form, core banking was simply an accounting system with a general ledger and subledgers with the purpose of ensuring they were balanced. In the last 40 years, banking has seen tremendous innovation with added new products such as debit cards, document/checking imaging, online banking, mobile banking, mobile deposit and much more. Even with these innovations and updates, the legacy core banking software remained the same. Rather than evolving, they either added third-party interfaces for new products or acquired the third-party altogether. These scenarios create security risk due to all the added connections and also provides poor data analysis and customer experience.
Demands for New Solutions
Because of the risks associated with legacy systems, as well as their inability to keep up with the demands of new technology, we recognized a major need in the core banking industry. This led us to create a core banking system that includes most banking products as part of the core – general ledger, teller system, document imaging, online banking, mobile banking, item processing and much more. Plus, we do provide interfaces to those third-party vendors we feel do a better job for particular functions – sticking to what we do best.
As you can tell, core banking plays an important role for financial institutions and with the ever-changing innovation surrounding banking, you will need a core banking provider that is flexible and agile to keep up with the innovation. We deploy both new products and services as well as updates and fixes approximately every two weeks. The frequency of the releases is a key competitive differentiator as our partners get updates as soon as they are ready.
We believe that product development is the single most significant investment opportunity that must be continuously invested in to compete successfully and meet or exceed customer expectations. Because we’re agile, we can deliver development in a more timely and tailored fashion. Bigger isn’t always better.