A core banking system is the systems in a bank providing its most basic functions for customers and their accounts. It’s a centralized online real-time environment allowing people to perform transactions such as opening new accounts and managing old ones, processing payments and cheques, and more. All that can be done quickly and from anywhere.
Main Elements of Core Banking
The core banking technology is making it possible to answer all the basic needs of clients on a daily basis, and also share updates in their accounts almost instantly.
The core banking system itself is a software created to support the main functions of the financial institutions. In fact, most often banks build it themselves.
Core banking services are closely related to retail banking, where the trends are usually around innovative mobile approach. As that’s what 75% of millennials rely on when it comes to managing their bank accounts and personal finances.
As you may know, the future of banking is one of the hottest topics in the field. Experts are always making predictions as to what new trends will come first next year, and what of the current features won’t be used that much. Because of this fast pace, all banking systems must be in place and regularly updated. No late response is allowed if an institution wants to keep its reputation, and no mistake due to an issue with the system should ever be experienced by a customer.
Other of the main elements of the core banking solutions include:
- New accounts;
- Managing relationships with customers;
- Mobile banking;
- Internet banking;
- Using ATMs;
The Advantages of The Core Banking System
Because it’s centralized, it also provides location independence. The banking customers can now also be corporate, so that gives freedom in terms of where you are and what you need a quick transaction for.
Not just that, but core banking is a win-win situation for both banks and clients. Let’s talk about the main benefits of using a system like that.
Here are some of the main advantages of prominent core banking:
What’s in It for Clients?
To begin with, people receive quick services for basic transactions.
While branch banking offers face-to-face solutions, with the core banking system the need to get anywhere is eliminated. That’s especially valuable for those living outside of big cities and whose access to banks isn’t always simple.
Internet and mobile banking make everything easier and faster too. As long as you’re keeping your records safe, you can do almost anything with your money in a matter of seconds and with a few clicks. No need to be tech-savvy either.
Core banking is flexible, and allows its users to expand their plans when they feel like and add new products. These procedures are streamlined for their convenience.
What’s in It for The Bank?
Core banking is often considered the backbone of a bank. Which means the system should constantly be assessed, managed and updated, even if it means changing directions sometimes to follow where the industry is going or what new solution customers feel more comfortable with. That keeps a bank alive, makes sure its reputation is kept over the years, and means flexibility for anyone working in it.
The better the core banking services, the bigger the customer retention rate. Who wouldn’t want that? Customer support is one of the most important departments in a financial institution and each request is taken seriously. As addressing the needs of clients means fixing little problems that stay in the way of seamless transactions and great service.
The core banking technology also uses centralized databases, which leads to collecting all necessary data quickly. As a result, there’s less errors and no need for employees to leave their current tasks and go fix something.
As you see, the core banking system is only evolving and can become more and more convenient, offering a variety of features, and being accessible to anyone who wants to manage their finances.