Digital innovations have disrupted many industries in the past decade. One particular sector that has undergone a major digital transformation is the banking sector.
In order to meet its customers’ demands promptly and because of the nature of the services the banking sector provides, it has had to adapt swiftly. The banking sector made sure that providing digital-first services to its customers would be its top priority. This initiative paved the way for Digital Core Banking and a host of services that are now included in the digital core banking system.
This article provides a brief overview of the digital core banking system and also explores the top 5 features of the core banking software.
What is core banking technology?
Simply put, digital core banking is banking technology that provides access to all of the traditional core banking activities and services via digital platforms. Core banking platforms ensure that customers have access to all of the banking services at any point, irrespective of the time, location, and other variables that otherwise limit such a convenience.
The primary difference between traditional core banking and digital core banking is the medium through which banking services are provided. In the traditional scenario, a customer had to visit a physical branch of a bank for even simple banking tasks such as ordering checkbooks or check deposits. The digitisation of banks enabled by core banking transformation allows customers to complete such tasks with just a few clicks. Customers can carry out everyday financial transactions from the comfort of their home or the office without having to visit the bank.
In spite of such incredible facilities in tow, core banking system implementation is yet to be embraced with enthusiasm across the banking sector. Industry research indicates that only 4% of banks plan to replace or overhaul their existing core banking systems in the next three years. This number is certainly going to increase as the banking landscape gets more competitive and customers get more demanding.
Types of core banking systems
Core banking systems are the computer-enabled back end activities of a bank that processes daily banking transactions and updates the accounts accordingly.
Types of core banking systems typically include deposits, withdrawals, check processing, cash transfers, business loan and credit processing, business credit card and debit card management along with a host of other important activities.
Core banking system architecture offers an easy interface that integrates ledger systems with technologically advanced reporting tools that makes the management of everyday banking activities extremely fast and efficient.
Core banking software increases the productivity of a bank by a huge margin and contributes to the overall revenue of the bank.
Features of core banking software
Core banking platforms offer a myriad of features and applications. These key features of core banking software make the whole process of digital transformation absolutely worth it.
- Customer onboarding: In a traditional banking scenario, customer onboarding is one of the most cumbersome tasks. Core banking applications make this process extremely easy. There is no hassle of endless paperwork and multiple verifications; the entire process is digitised and completed within a few clicks.
- Digital cash management: Day-to-day cash transactions such as deposits, withdrawals, and transfers can be processed digitally without any in-person contact. This makes the mundane banking activities safe and efficient. This also includes other banking activities such as bill payments, credit card payments, and online retail transactions. This is particularly convenient during the times of Covid-19 when customer safety is vital.
- Secure data management: Data migration and data management are two of the most critical aspects of the banking sector. Core banking platforms make data management both manageable and seamless. Consolidated information that showcases customer data, business data, and transactional data can help the bank make important decisions. Accurate data management can help a bank recommend the right financial products to its customers. Business and transactional data can help banks evaluate growth strategies and launch new products that benefit their customers.
- Mobile applications: A mobile app has become an essential extension of a bank’s digital presence. Mobile applications and Net Banking facilities allow customers to access their account from anywhere. This ensures customers that they can carry out their banking activities without any interruptions. This also improves customer engagement in banking.
- Advanced security integration: As banking activities continue to migrate online, money mismanagement and fraudulent transactions may occur occasionally. One of the key advantages of the core banking software is the top-notch security integration across all the verticals of a bank. Features such as dual authentication processes and digital identity management ensure tight security to both the banks and their customers.
We hope this article helped you understand the importance of core banking systems and offered further insights about core banking system features.
There is no denying that the business of banking is a complex one. Core banking software and advanced banking applications can help banks adapt to the digital era and provide great customer experience. After all, customer engagement and a superior banking experience are the two pillars the drive both growth and profitability of a bank.
In order to thrive in this business and also have a competitive edge, banks need to make core banking transformation their utmost priority.