Core Banking Solutions allow customers to manage their bank accounts using the interconnected branches from any part of the world. In last couple of decades, it changed the way banks used to operate. The first version of the core banking solutions was intended to align business processes across different branches of a bank and create a friendlier banking experience for customers – it allowed customers to access their bank account and perform basic transactions from any branch of the bank which was a part of the network. Over a period of time, with technological advancements, Core Banking Solutions have evolved a great deal. The latest version is comprehensive, all-inclusive software suites which allows banks to take care of all their technological as well core banking needs from a single platform.
A superior core banking platform lays the foundation for the success of a bank. A good Core Banking Solution can align business processes across the different branches of a bank, streamline the database management and even provide business analytics such as risk analysis and profitability analysis.
With increasing demands for fast and friendly banking experience, there has been a surge in the number of companies that provide Core Banking Solutions to make banking faster and user-friendly. There are several good Core Banking Solutions such as Finacle, Oracle FLEXCUBE, IDEALINVENT and Fiserv and so on which have transformed the banking process across the world.
Benefits of using Core Banking Solutions for Banks
Core Banking Solutions such as Finacle not only make banking simpler for customers, it also makes banking simpler for bankers. Let’s look at the top 5 benefits of Core Banking Solutions from a bank’s perspective.
Increase in Customer loyalty: Core Banking Solutions enable the banks to provide exceptional customer services. It not only allows customers to access bank accounts from any interconnected branch across the world – it also gives the customers a chance to manage their bank accounts any time during the day from anywhere in the world. With easier transactions and transparent banking experience, banks are able to retain current customers, attract new customers and expand customers’ relationships beyond transactional experience. Core Banking Solutions have enabled the banks to come up with customer-centric financial products and services and move away from traditional, complex and sluggish manual banking processes.
Increase in employee efficiency: Core Banking Solutions streamline the business process to make it lean and efficient. It helps the frontline staff manage the customer database easily, streamline general ledger and reporting and reduces the work load by completely or partially automating certain tasks such as telebanking. Communication features in the modern Core Banking Solutions also make information exchange between the employees across the different branches of the bank across the world seamless and faster. Efficient work, thus, results in more business opportunities. Core Banking Solutions also have enabled the banks to utilize limited professional manpower more effectively. As most of the transactional processes get automated, the chances of manual errors also reduce considerably.
Reduction in operational and support expenses: Core Banking Solutions enable banks to handle the volume of customers more efficiently. Online banking reduces the number of footfalls in the bank branches every day. This enables the bank to cut down infrastructural, operational and support expenses to a great deal. ATM, Internet Banking, Mobile Banking and Payment Gateways have reduced the need for manual processing of financial transactions in the bank – this helps the bank in managing work at a much efficient rate than before and also brings down the operational and support expenses. Reduced time-to-market for new product offerings, faster clearing, settlement and reconciliation also translate into operational effectiveness.
Reduced IT Maintenance: The modern Core Banking Solutions are designed to consolidate several stand-alone applications and optimize the costs associated with the maintenance of legacy systems. It allows banks to cut down on IT maintenance costs by moving to a shared services platform, which in turn also results in improvement of bank-end efficiency of the branches. Features such as centralized printing and backup help in reduction of expenditure on separate printing and backup machines at branches. Core Banking Solutions are highly secure and therefore, they also reduce the chances of loss of information and security compromise of customer data which in turn reduce the chances of any legal penalties.
Immediate access to analytics: Most of the modern Core Banking Solutions come integrated with applications for business analytics. This helps in accessing the valuable information in the data collected in the back-end systems and turn it into actionable insights on a need basis. Several Core Banking Solutions provide customized as well real time data on any dimension. This information helps the bank in rectifying obvious issues immediately. This also helps banks gather data for a particular business process and study its long term impact on the business. Core Banking Solutions have made banking transparent and smarter.
In recent years, both companies that develop Core Banking Solutions as well as banks have matured in their understanding of the constantly evolving banking ecosystem. This understanding has led to visible improvements in the designs of recently released solutions and the requirement gathering, project management and business planning front on the bank’s front.
Core Banking Solutions have been transformational for the banking industry. It has made banking smarter, accessible and easier for customers globally. It has also made the banking industry competitive in a healthier sense – all the banks are now competing to provide the best banking services to customers. It has been beneficial for the banks financially as well and helped reduce the labor cost in the branches by automating several manual banking processes and cutting down the infrastructural, operational and support expenses by providing all the necessary banking services online. By facilitating faster rollout of products and reducing the time to market for newer products, Core Banking Solutions have also led to intangible benefits for banks such as increase in market share and enhanced competitiveness due to reduced costs of deposits.
Author Bio: Ryan North is a Professional Blogger and Entrepreneur at Enterprise Edges. He has been into the Banking industry since 2001 and helped many companies establish their sales goals via content and brand campaigns.