9 top core banking solutions you should know
The banking industry is a sector of the economy, that, in recent years, has experienced very dynamic digitization processes, which were additionally strengthened and accelerated by the COVID19 pandemic. However, this is not surprising. A recent report released by Ernst & Young showed that almost 50% of banks did not modernize outdated IT systems as quickly as they should have, and almost 43% of American banks still used COBOL – a programming language developed in 1959! Fortunately, providers of more and more modern core banking solutions, created in almost all corners of the world, come to the rescue.
The definition of core banking
A back-end system that processes banking transactions throughout a bank’s multiple branches is known as core banking. Deposit, loan, and payment processing are all parts of such a system. In addition floating new accounts, servicing loans, calculating interest, processing deposits and transactions, and customer relationship management activities are all essential fundamental banking services in this type of system.
Core banking systems are designed to give existing and potential customers more control over their account activity. Thanks to technological advancements, transactions have become safer, faster, and less demanding. Core banking systems have been a critical feature of banking in recent years because these transactions can be completed remotely from anywhere on the planet.
Core banking solutions may reduce operational costs significantly, resulting in fewer work requirements for execution. They also allow customers to be more accountable. In addition, core banking systems are more user- friendly and efficient thanks to software application-based platforms. The advantages of core banking systems are numerous, including keeping up with a rapidly changing market, streamlining banking operations and making them more straightforward for customers, and expanding a bank’s reach to remote locations.
Born in the cloud
According to Gartner– by the end of 2023, public and private cloud will each account for 5% of commercial off-the-shelf (COTS) core banking installations for an overall 10% of the COTS market. New core banking software platforms are built on cloud and digital technologies and use open API-based architecture to better interface with various internal and external services and systems.
Lower costs, faster time-to-market and more superficial connections with multiple services that may improve customer experiences are all advantages of new core banking systems. However, developing core banking software in-house is a complicated and time-consuming process that can overwhelm teams and delay product launches. Many well-known fintech brands have outsourced their core banking software from fintech providers.
Below, we present nine of the most interesting IT solutions on the market that are worth considering when choosing a modern and technologically advanced transaction system for your financial business.
Core banking software list for 2022
1. Mambu – SaaS cloud banking platform
Launched in 2011, Mambu is a software-as-a-service, cloud-native, API-driven banking engine provider that powers lending and deposit services. The company enables financial institutions of all sizes to design, launch, service, and scale their banking and lending portfolio. It empowers over 7,000 loan and deposit products which serve over eight million end customers, with more than three million active accounts in over 46 countries, ranging from fintech to traditional banks. Mambu’s historical customer base includes microfinance institutions and fintechs. However, Mambu currently focuses on larger banks launching spinoffs or migrating. Its installation base is spread mainly across Western Europe, Latin America, and sub-Saharan Africa. The country with the most installations is the U.K.
2. Thought Machine – foundation of modern banking
Thought Machine is a fintech company that builds cloud-native technology to revolutionize core banking. Its mission is to solve one of the banking industry’s primary problems: its reliance on outdated IT infrastructure. Nearly all banks are stuck on a legacy IT platform, which cripples their ability to innovate and give their customers the type of service they deserve.
The company provides a solution to this: Vault – a complete retail banking platform that’s capable of being configured easily to suit the needs of any bank. They’ve built Vault from the ground up as a cloud-native, microservice API architecture platform. Thought Machine has a deep culture of engineering excellence, and they believe it’s this that delivers a solution compelling enough to engender a seismic shift in the banking industry.
3. BOS by INCAT– bringing the digital revolution to banking
Founded in 2018 BOS is a fully flexible, cloud-native, and composable transaction system dedicated to fintech start-ups and neo/challenger banks. BOS has been created by INCAT – a fast-growing tech company that wants to empower companies to bring the digital revolution to finance and banking.
The BOS system is perceived as one of the most flexible banking software on the market, and is a first-choice solution for companies looking for quick implementation, reasonable costs, and easy integration with external systems. BOS is cloud-native, API-driven, and based on microservices software solution. It has been built from scratch to operate securely and efficiently in the cloud, but it can also be installed in any computing center (private cloud, on-premises).
BOS system is perceived as one of the most flexible banking software on the market
BOS’ functionality is designed according to the Business Lines- concept (BOS Core, Payments, Savings, Lending, General Ledger) and is tailored to the customer’s business ideas and goals. The system is available as a licensed solution with implementation and maintenance support, as well as a subscription model based on license rental with maintenance support, preceded by implementation of the system (low entry cost threshold). BOS is also a sharia-compliant core banking software. It allows its customers to run any financial products in compliance with Islamic law. The software is used by next-gen international fintech brands all around the world (Belgium, Saudi Arabia, Lithuania, Poland, Hungary etc.).
4. Temenos – a digital core-banking solution you can bank on
Temenos Group AG is a market-leading provider of banking software systems to retail, corporate, universal, private, Islamic, microfinance and community banks.
Headquartered in Geneva with 68 offices worldwide, Temenos serves over 1,000 financial institutions in more than 125 countries across the world. It was founded in 1993 in Geneva, Switzerland. From the outset, it had a simple mission: to rid the banking industry of its legacy software.
Ever since then, Temenos has worked to make this mission a reality. It has invested more than USD1bn in developing great banking solutions. It has grown its product set from core banking to payments, wealth management, business analytics and channels, offering a comprehensive set of solutions to meet the industry’s needs.
5. FIS – the foundation stone of a modern banking platform
FIS is an American multinational Fortune 500 corporation that offers a wide range of financial products and services.
FIS is best known for its development of Financial Technology – FinTech – and as of Q2 2020, it offers its solutions in three primary segments: Merchant Solutions, Banking Solutions, and Capital Market Solutions. FIS focuses on retail and institutional banking, payments, asset and wealth management, risk and compliance, and outsourcing solutions. It serves more than 20,000 clients in over 130 countries.
6. Oracle Flexcube – Core Banking Made for Tomorrow
FLEXCUBE is an automated universal core banking software developed and introduced by Oracle Financial Services. This solution is designed for financial organizations and banks. It offers customer-centric core banking functionalities. It ensures a holistic view of all customers and enhanced communication between bank employees and consumers.
Due to FLEXCUBE’s opensource environment and multiple API management, its users can create their business logic and interfaces, as well as integrate the system with third-party applications. This international core banking system is compliant with various regulations and suitable for any bank in over 115 countries.
7. Finastra – the future of banking
Formed in 2017 by the merger of Misys and D+H, Finastra provides a broad portfolio of financial services, spanning across retail banking, transaction banking, lending, and treasury and capital markets. The solution enables customers to deploy mission-critical technology on-premises or in the cloud. Finastra is an open and reliable solution that allows customers to accelerate growth, optimize costs and mitigate risk. Forty-eight of the world’s top fifty banks use Finastra technology.
8. nCino – by bankers for bankers
Launched in 2012, nCino offers a cloud-based bank operating system created by bankers for bankers. The system helps increase profitability, productivity gains, regulatory compliance, and operational transparency at all organizational levels as well as across all lines of business.
Following a process structure similar to a bank’s loan accounting system, this bank operating system offers combined services through its business process management, loan lifecycle, business intelligence, and document management solutions.
9. Backbase – re-design your bank around the customer
Backbase was founded in 2003 and provides all the building blocks banks need to fast- track the implementation of their next-generation digital banking vision. The platform enables banks to create and manage seamless customer experiences across any device that’s directly integrated with any back-end system. Superior digital experiences are essential to staying relevant to consumers, and Backbase enables financial companies to rapidly grow their digital business.
More than 150 banks and credit unions around the world have standardized the Backbase platform to streamline their omnichannel/digital operations, including ABN AMRO, Barclays, CheBanca!, Credit Suisse, Deutsche Bank, Fidelity, Hapoalim, HDFC, KeyBank, NBAD, OTP, PZU, PostFinance, Societe Generale, and Westpac.
As we can see in the above list, there are more and more solutions that can respond to increasingly demanding fintech companies.
However, it’s worth looking for a solution that in addition to its technologically advanced architecture, is able to flexibly adapt to all of our needs and enable a quick launch of any financial product.