There has been a significant increase in the number of people who prefer digital modes to perform everyday tasks. Be it ordering groceries at home or making important bank transactions, no one likes to spend half of their time doing everyday chores.
The banking sector has specifically seen a very noteworthy transition post-pandemic. A study by Deloitte suggests that consumers are more inclined towards digital channels for transactional activities instead of the traditional branch-based process.
Moreover, even the younger consumer segment prefers digital-only banks, leaving behind the age-old legacy of long queues and unattended consumer requests.
Given the circumstances, banks have chosen to streamline their processes with Core Banking Solutions to provide their customers with a platform that can help them ease the struggle.
But what are Core banking Solutions? And how do they help the situation?
Let’s see.
Core Banking Solutions: Meaning, Purpose, and More
Core Banking Solutions or Platforms are centralized data centers that are created by interlinking the segmented branches of banks to ensure smooth operations like loan management, withdrawal, deposits, and more digitally.
This means that banks, through such systems, allow themselves to become even more accessible by letting their customers perform major transactional activities online via a single platform.
You can think of a Core Banking Solution like a single dashboard powered by a cloud-based data center that provides customers with all services at their fingertips.
The purpose of such a system is to decrease the friction between the banks and the customers, allowing them ease and more time at hand to invest in more valuable tasks.
A few core banking services include account management, payment services, lending services, deposits, and credit and debit cards.
Benefits of Core Banking Software
Streamlined Operations
These platforms are created with the very motive of streamlining regular banking operations such as account creation, processing of transactions, and more. Thereby creating a seamless process and eliminating the multi-step time-consuming process.
Better Customer Service
Elimination of a multi-step traditional process points directly towards a more memorable customer experience that is more suitable and also personalized for the audience of today.
Cost Efficient
By digitizing regular banking transactions, banks save a lot on everyday overall overheads. This further ensures cost savings with respect to labor costs, better utilization of resources, and more.
Graded Data Management
As mentioned earlier, a platform like so provides banks with a centralized database that securely syncs the information of separate branches. This further allows the banks to have a single view of all information and prevents siloes.
Key Features of a Core Banking Solutions:
Chatbot
Being available for customers around the clock is by far the most customer-centric approach that can be taken, and Chatbots are the real deal when it comes to that. The more personalized the experience is for your customers, the more you set yourself up for success. This is especially true in the banking sector, where customers trust banks with their hard-earned money. Thus the very need for a feature like Chatbots - for reassurance.
Integration
A centralized data center that not only stores all customer data but also processes and secures the same is necessary for a core banking solution to function efficiently. Such a platform syncs information of customers from various departments and makes it accessible on a single dashboard. Streamlining information for both customers and banks only becomes possible with integration. Thus, it can not be deprioritized.
Transaction management
Management of funds, transfers, and other financial transactions is another vital feature of a Core Banking Solution. Such a system ensures that the processes are streamlined and done in a timely manner without any delays. Transaction management also helps create a secure platform for all transactions and avoids unnecessary hassles.
Multi-channel banking
Another very important feature of a core banking system is multi-channel banking, which allows customers to manage their banking transactions via their preferred channel, be it ATM networks, online banking, mobile banking, or any other digital channel. This helps bring convenience to customers and also improves their overall experience.
Risk management
In this highly dynamic era, cyber security has become a significant issue, and a system of core banking helps ensure that all risk management features required to provide utmost safety to the customers, like anti-money laundering (AML) and know-your-customer (KYC) compliance, fraud detection, and credit risk assessment are there.
Types Of Core Banking Systems:
On-Premises Core Banking System:
Operated and hosted on the bank’s server locally, an on-premise system is similar in terms of the process but different regarding the management of the same. Since it requires the bank itself to be accountable for the hardware, software, and networking infrastructure, including its maintenance cost.
Cloud-Based Core Banking System:
Contrary to an on-premise CBS system, a cloud-based model is hosted on remote servers in the cloud, eliminating the need to maintain infrastructure for the same. This allows the banks to access the data centers through the internet without bearing the headaches of additional costs or maintenance.
SaaS (Software-as-a-Service) Core Banking System:
A SaaS CBS system is the amalgamation of both cloud-based and on-premise platforms. This is so because a SaaS-based platform is hosted in the cloud by a third-party provider who then offers it as a service to banks. However, the banks are here accountable for maintaining the infrastructure.
Conclusion
A core banking system can help customers and banks find a middle way where they can perform the processes in a more streamlined and seamless manner eliminating cyber, financial, and other risks associated with the process. The same can also help the banks retain and serve their customers more promptly. Given the platform's benefits, the time has finally come when embracing such a technology has become essential for market players.
Long queues and particularly long waiting period for just about any transaction was normal.
Any entry only reflected after more than 24 hours as information went to data centers in batches at the end of the working day.
However, over the next 40 years most banks chose to create a Centralized Online Real-time Exchange or Environment (CORE) to manage their operations, thus giving rise to Core Banking.
In India alone, the number of public sector bank branches with core banking implementation went from 79.4% in March 2009 to 90% in March 2010.
All over the world, the numbers are closing in on cent per cent.According to US-based research and advisory firm Gartner, core banking system (CBS) is basically a back-end system that performs banking transactions on a daily basis and updates accounts and financial records.
It is essentially a bank’s nervous system that if affected can change the bank’s operations drastically.
According to IMARC Group’s latest report, titled “Core Banking Software Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2021-2026”, The global core banking software market exhibited strong growth during 2015-2020.
It also aids in servicing loans, floating new accounts, calculating interests, processing deposits and withdrawals and managing customer relationships.
Core banking software reduces operational costs, minimizes human errors, facilitates the decision-making process, ensures lesser workforce requirements for execution and enables greater accountability of the customers.Request for a PDF sample of this report: https://www.imarcgroup.com/core-banking-software-market/requestsampleA significant rise in the market growth can be attributed to the numerous advantages offered by core banking software, such as process standardization, transaction accuracy, improved management of documentation and records, and ease in the submission of regulatory reports.
Furthermore, the growing shift towards online banking solutions due to hectic work schedules of the consumers is also augmenting the market growth.
Additionally, core banking software helps in receiving e-payments instantly and transferring funds remotely, thereby providing a positive outlook to the market.
Looking forward, IMARC Group expects the global core banking software market to grow at a CAGR of around 9% during the forecast period (2021-2026).As the novel coronavirus (COVID-19) crisis takes over the world, we are continuously tracking the changes in the markets, as well as the industry behaviors of the consumers globally and our estimates about the latest market trends and forecasts are being done after considering the impact of this pandemic.Competitive Landscape with Key Players:CapgeminiFidelity Information Services Inc.FinastraFiserv Inc.HCL Technologies LimitedInfosys LimitedJack Henry & Associates Inc.Oracle CorporationSAP SETata Consultancy Services LimitedTemenos AGUnisys Corporation.Core Banking Software Market Segmentation:Breakup by Solution:DepositsLoansEnterprise Customer SolutionsOthersBreakup by Service:Professional ServiceManaged ServiceBreakup by Deployment:Cloud-basedOn-premiseBreakup by End Use:BanksFinancial InstitutionsOthersBreakup by Region:North America (United States, Canada)Asia-Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)Latin America (Brazil, Mexico, Others)Middle East and Africa.Ask Analyst for Customization and Explore full report with TOC & List of Figures: https://www.imarcgroup.com/core-banking-software-marketIf you want latest primary and secondary data (2021-2026) with Cost Module, Business Strategy, Distribution Channel, etc.
