Financial Entities: Indicators That Indicate The Need For Advanced Core Banking Platform

As the new year approaches, many institutions reevaluate their core banking platforms to stay competitive.  

To make the right choice, banks should consider eight factors based on surveys, industry research reports, and interviews.  

A core banking system is a digital platform. It orchestrates various banking functions to ensure seamless transactions with an enhanced customer experience.  

It comprises software and applications designed to streamline operations and provide a solid foundation for a bank’s digital transformation.  

The global core banking software market is projected to generate $49.7 billion in revenues by 2032, with a 17.6% CAGR from 2023 to 2032.  

Bankers must choose a system that aligns with their goals, ensuring scalability, flexibility, security, user interface design, performance, cost-effectiveness, and future-proofing to drive innovation and market responsiveness in the digital era. 

Key Indicators For An Advanced Core Banking Platform 

Given below are the key indicators that tell you that your financial institute needs a core banking platform— 

1. Need For Enhanced Scalability & Flexibility

The adaptability of a core banking system is key to its success, with scalability and flexibility being pillars in supporting this.  

Scalability ensures the system can handle growing transactions and users, while flexibility allows for seamless integration with new technologies and applications.  

Successful, scalable systems have modular architectures that can easily accommodate increased workloads.  

Banks must assess the compatibility of their core banking system with emerging technologies to stay competitive and meet evolving customer expectations.  

Financial institutions need a core platform that supports growth and can scale accordingly, with extensive API catalogs and third-party technology integrations enabling institutions to stay adaptable.  

This agility ensures that banks can quickly respond to market demands, regulatory requirements, and technological advancements. 

2. To Enhance Security And Compliance

Banks require core banking systems with robust encryption and authentication measures to safeguard customer information and transactions from potential cyber threats. 

Compliance with industry standards is a non-negotiable aspect, and banks seek core banking solutions that adhere to these standards, guaranteeing a secure environment for financial transactions. 

Compliance with different banking regulations is crucial for a trustworthy core banking system, as it helps mitigate the risk of legal repercussions and boosts the bank’s standing. 

A solid platform should have stringent security measures, including data encryption, access controls, audit trails, and compliance with regulatory standards. 

Financial institutions must comply with certain legal requirements when conducting financial transactions. Core banking systems must be more flexible and adapt to new regulations faster. 

3. Helps Bring Down The Operation Costs

Traditional Core Banking Systems have significant initial development costs and require relatively high maintenance expenses.  

This is mainly because updating a monolithic system necessitates modifications to the entire infrastructure, which can be expensive.  

On the other hand, modern Core Banking Systems are based on the “Pay-as-you-Go” concept, which means you only pay for the services you use. Besides, these platforms usually offer subscription fees with lower costs for the initial deployment.  

This makes them a cost-effective and practical solution for banks and financial institutions looking to streamline their operations while controlling expenses. 

4. To Make Your Systems More Inter-Connected

Many traditional core banking systems are independent units with limited connectivity to other systems and services, such as payment solutions.  

This lack of interconnectivity can often result in complex integration processes that can take several months or even years to complete.  

However, Core Banking Platforms enable easy collaboration with fintech partners and efficient banking operations management by facilitating interconnection with external systems and services.  

This makes them an ideal solution for banks that want to streamline operations and work more effectively with their partners. 

5. Integrates All Banking Systems

Banks rely on various systems and applications to support their operations.  

However, they often encounter product and department communication challenges, which they hope to address with a core banking system. The integration capabilities of such a system are crucial to its success. 

A cohesive core banking platform facilitates easy data transfer, reducing expenses, expediting account opening, and making launching new products more affordable.  

Moreover, it improves the user experience by ensuring that each component piece seamlessly fits into the technological puzzle, even if it was added later or by a different vendor.  

The level of integration also directly impacts the user experience by reducing redundant processes and creating a more seamless feel.  

Additionally, tight integration ensures parity across digital platforms, meaning that the bank’s digital experience on the phone should match the experience on a laptop or tablet.  

The vendor can mitigate any headaches around implementation time by making integration easy. 

6. Helps Maximize ROI

When evaluating the cost-effectiveness of a core banking platform, banks consider the following factors: 

• Potential customization or integration expenses. 
• Initial costs for ongoing support. 
• Implementation investment. 

The primary source or their current partners frequently offer the most favorable offers on new technologies due to the reduced number of implementation and integration steps involved. 

While customer demands may drive technological priorities, most investments aim to save money in one way or another.  

For example, responsive cloud-based architecture can eliminate some software and hardware expenses.  

Streamlined onboarding can boost the bottom line by expediting account opening and spending. 

7. Offers Easy Customization

Bankers seek banking functions that seamlessly fit together and interact cohesively. The main platform should be easy to navigate, with search functionality, clear data, readily available tutorials, and reliable service representatives to assist with the platform as required.  

Conserving UX design principles can make a big difference on the vendor side.  

Bankers often commend platforms with a natural hierarchy, an aesthetic appeal, straightforward language, and accessibility.  

Customers and users alike appreciate a consistent and seamless experience when using the platform, whether accessing their data or receiving services. 

How To Integrate Core Banking Platform? 

The text highlights the importance of core banking technology and how financial institutions can use it to remain competitive and deliver exceptional customer service.  

For instance, Skaleet’s next generation banking platform helps financial institutions become more efficient, agile, and scalable.  

Core Banking Systems are monolithic, expensive, and rigid. It is distinct from such systems as affordable, monolithic, and inflexible.  

Moreover, it offers features such as open, modular architecture, secure platform, API library for developing products and services, time to market 4x faster than the market average, continuous delivery solution, and an agnostic, scalable cloud.

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