What is core banking?

Core banking has historically meant the critical systems that provide the basic account management features and information about customers and account holdings.

Modern packaged core banking platforms are typically more holistic and often include these features as well as:

  • Customer relationship management features including a 360 degree customer view
  • The ability to originate new products and customers
  • Banking analytics including risk analysis, profitability analysis and provisions for capital reserve allocation and collateral management
  • Banking finance including general ledger and reporting
  • Banking channels such as teller systems, side counter (sales) applications, mobile banking and online banking solutions
  • Best practice workflow processes
  • Content management facilities
  • Governance and compliance capabilities such as internal controls management and auditing
  • Security control and audit capabilities

As you can likely tell from the two very different descriptions above – older core banking platforms and modern core banking platforms are quite different.  Replacing these older systems with modern ones is often a time when banks consider strategic transformation, process revision and identifying new target operating models.

These are considered some of the most (if not the most) challenging and rigorous initiatives that organizations can undertake with some programs lasting ten years or more and others assigning teams of hundreds working towards a single “big bang” event.

Regardless of how you define or assess these programs it is clear that this is an emerging area where collaboration and discussion can help develop best practices in this area.