Guide:
Best Core Banking Platforms in 2024
Welcome to the ultimate guide to navigating the ever-evolving world of core banking software in 2024! As the banking landscape undergoes rapid transformation, understanding the pivotal role of core banking systems is more crucial than ever. Join us as we delve into the fundamentals of core banking, explore market dynamics, and unveil the top 10 core banking platforms poised to revolutionize the industry. Discover how embracing cutting-edge technology can empower banks to enhance efficiency, elevate customer experiences, and stay ahead of the curve in this dynamic era of finance.
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Author: Ekaterina Podgaiskaya
Last updated March 27
Contents
Introduction
The banking industry is changing quickly, and at the heart of this change is core banking systems. These help banks work better, innovate, and make their customers happier. In 2024, core banking software will play an important role like never before. This guide helps you understand what’s happening in the world of core banking. We start with basic information about core banking software and then talk about what the market looks like right now. We also highlight key trends that we expect to shape the industry in 2024.
In our guide, we present detailed reviews of the top 10 core banking platforms available in the market, mentioning the features and benefits they offer. Lastly, we talk about problems these platforms might encounter, considering how complex it can be to bring new things into the banking sector. Join us as we explore the maze of core banking solutions out there today to find out which are set to excel most significantly in 2024.
What is Core Banking Software?
Core Banking Software, often known as CBS, is a tool used by banks to handle banking transactions. These occur in various branches of the bank simultaneously. CORE stands for Centralized Online Real-time Environment. This means the customer sees their bank as one unit, no matter where they are.
Customers can carry out various transactions like managing loans and making payments with this system. They can do it instantly because of its real-time feature.
CBS has the ability to process deposits, loans, and credit while also being able to connect with accounting systems and report tools. If a customer takes money from an ATM or branch office, CBS sends that request directly to the main data center, which then approves it.
In 2022 alone, core banking software was thought to be worth USD 12.51 billion globally. The market’s forecast indicates that its value could go all the way up to USD 47.37 billion by the year-end of 2030. This equates to showing a steady growth rate of almost close to 18%.
The core banking software market expects growth due to more and more key players investing in fintech technologies, including CBS. Another factor that will help boost this growth is the growing necessity to manage customer accounts on a single server.
How to Choose a Banking Core Platform
The Core Banking Market changes quickly due to new technology and what customers want. In 2024, banks worldwide may struggle because the world’s economy is slow. They will face a difficult time making money and handling expenses. Different challenges are shaking up the basics of how banks work.
Fast technological changes affect how banks run and serve their customers’ needs.
In 2024, it’s expected that effects from advancements like AI, merged business sectors, integrated finance services, expansion of digital data, digitization of money itself along with energy conservation efforts (decarbonization), digital identity securing systems, and fraud protection measures are all set to increase significantly.
Key Technology Trends in the Core Banking Industry
The core banking industry is on a new path today. The reason lies in advancements in technology and rising customer expectations. Important trends in technology are changing the future of core banking. These different trends all aim to boost growth, make things run more smoothly, and make customers happier.
Banks now must use these trends, or they risk being left behind by competitors. If banks embrace new technologies, it can help them work more efficiently, decide smarter, and offer better services. This makes their operations top-notch and their customers very satisfied. So, for banks to grow and win in their industry, staying updated with tech trends is a key step.
But what are some trends shaping the future of this sector? Let’s dive into them:
1. Modularity
First, let’s talk about Modularity. What does it mean in terms of banking? It refers to universal banks breaking their services down according to business capabilities rather than technical abilities. This new approach lets banks be more flexible and creative without compromising on service integrity. It also encourages faster creation of innovative financial products by rearranging different banking services. Think about it as building with Lego bricks - pick up pieces according to your desires and assemble something unique!
2. API Orchestration
API orchestration is also gaining popularity among banks these days. If you wonder why APIs attract so much attention - they offer easy, quick, secure ways for all customers to enjoy banking products or services without much hassle. With APIs, your bank can adjust its operations bit by bit or service by service, depending upon which operations need immediate attention over others. As time passes by, banks start getting comfortable with their growing API maturity at various levels such as technology management and personnel training spheres. This further helps to ease customer experience and provide efficiency to the banking operations.
3. Cross-Platform Technology
Banks are getting advanced with the aid of cross-platform technology. It is pushing banks towards digital processes, both at the customer front and in the back office. This tech lets banks use newer tools either developed by themselves or others, which results in better efficiency and improved service for customers. Cross-platform technology offers an unbroken, multi-channel experience to bank users. What it means simply is that customers get to interact with their bank on varied digital platforms like mobile apps, web browsers, and even social media while having a unified feel across these channels.
4. Artificial Intelligence (AI) and Machine Learning (ML)
Artificial Intelligence and Machine Learning are shaking up the banking world. They help banks work better and improve how customers feel about banking. These tech tools make tasks automatic, lower mistakes, and use resources well, which saves money. This tech also supports tailor-made services to boost customer contentment. Moreover, these tools open new doors by making sense of lots of data. So, these tools aren’t just helping banks do a better job, but they’re also improving the customer’s experience in banking.
5. Blockchain Banking
Moving on to Blockchain technology - it is really changing the face of banking. The beauty lies in its secure manner of recording things without revealing too much – allowing for efficient and open processes within financial systems. It provides quicker, low-cost transactions that are very safe for everyone involved, thus making many excluded members part of an inclusive mechanism for interaction with banks while benefiting both parties.
By including blockchain in their system functionality, banks now provide improved services at reduced cost - staying faithful to remaining competitive and deepening satisfaction for clients. Hence, this essentially helps produce not only operational efficiency among internal processes but also continues restructuring client experiences positively within each bank engaging with them.
6. Hyper-Personalized Banking
Banking has now become far more personal than ever with hyper-personalization. This trend puts customers at heart, with AI and behavioral data science fueling it all.
This technology helps banks to understand each customer’s unique needs and then develop products or services that fit these needs perfectly well. When banks choose this method, they stand out from the crowd, earning more profit while leaving customers satisfied.
7. Decentralized Finance (DeFi)
Decentralized Finance, often called DeFi, is a new technology in the FinTech industry. It uses secure ledgers which are spread out across multiple places, quite similar to how cryptocurrencies work. The main goal of DeFi is to shake up the central banking system we have been familiar with until now. It does this by giving power back into the hands of individuals through transactions that take place directly between peers without using a middleman.
Think about replacing your bank with an automated system for borrowing and lending or managing assets like stocks and bonds - that’s essentially what DeFi aims to do.
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Top 10 Core Banking Platforms in 2024
In 2024, leading core banking platforms will change the way banks work. These platforms use advanced technologies to better their operations and flexibility, which in turn can help banks to do transactions quicker, handle client data well and extend more services. High efficiency means improved customer care because banks can meet customer demands faster and come up with solutions more quickly. Also, these platforms provide smooth banking experiences from online to mobile apps, making customers happier. Therefore, in 2024, using top-notch core banking platforms will significantly enhance how banks serve their customers. Here are some of the top core banking platforms in 2024.
Mambu is a cloud-based platform offering banking and finance services. This software helps banks and other institutions to set up different lending or deposit services quickly. Not only banks but also lenders, fintech companies, and even retail businesses use Mambu for rapid, secure digital financial product creation while saving costs.
The unique feature of Mambu lies in its modern composable structure. This forward-thinking approach when setting up banks or lending entities embraces change as part of the norm. Hence, it offers control for these institutions, so they can develop technologies that exactly meet their service infrastructure needs.
Around the world, over 200 brands trust Mambu with their operations. Well-known international ones include ABN AMRO, Santander, etc. Additionally, over 45 million people across the globe depend on this platform every month.
Temenos is an advanced banking platform rooted in cloud technology. It supports a variety of banking activities, including retail, corporate, treasury, and more. This helps banks to offer unique products that customers want while keeping costs low.
Using Temenos lets banks make changes faster and more cost-effective. Instead of spending money upfront (CapEx), they pay for what they use (OpEx). This also reduces the overall cost burden on banks.
What makes Temenos special is its commitment to progress and compliance, along with an open, capable platform. It’s designed to work well with cloud services, which means the banks can provide appropriate services for all types of businesses, no matter their size.
When we look at numbers, over 1000 banks from more than 150 countries trust Temenos for delivering top-notch solutions to their customers. For instance, it famously managed to support up to 150,000 transactions every second, processing large amounts of finance loans and retail accounts through the Temenos Banking Cloud.
Finastra stands as a cutting-edge core banking platform anchored in the cloud and fueled by APIs. It offers a wide variety of solutions that are tailored toward different types of banks, be it retail, commercial, universal, community-based, or credit unions.
Banks find Finastra attractive due to three key factors: Its agility to enable swift responses to changes in the market, its cost-effectiveness, which reduces financial strains on institutions, and seamless integration, which allows compatibility with best-in-market products. This connectivity truly bridges host and agent banks with corporate entities or SME clients looking for easy reach into payments, forex dealings, liquidity management, etc.
What really makes Finastra stand out is its open, agile core that champions long-term innovation without compromising flexibility. In addition to this remarkable feature is their focus on user experience. Moreover, the platform doesn’t stop there but allows banks an opportunity to build unique products that resonate with the needs of the consumers. This directly impacts businesses in a positive manner.
Velmie offers all-in-one core banking software platform for next-generation finance. Velmie provides a suite of products to build engaging and future-proof solutions for banks and fintechs.
Velmie empowers financial institutions with cutting-edge tech solutions providing great customer experiences, ultimate performance, and extreme scalability. The modular cloud-native digital banking platform allows building very unique fintech solutions across the world. With the partner ecosystem and API orchestration layer, our clients have quick access to payment services from market-leading companies. Velmie carefully maintains security on different levels including the infrastructure, software development practices and the company itself.
Velmie is not only a software platform but your long-term partner helping to maximize business performance throughough the lifecycle.
Fiserv is a core banking platform that adapts well to varied needs. It is known for its use by many financial institutions as it covers customer onboarding, transaction handling, and data tracking, among other tasks. Fiserv wins over banks due to how easily it works with high-performing products in the market while also being light on cost and having a quick response time.
This platform stands out because of its openness to innovation, allowing adaptability into the future. Not forgetting user experience, Fiserv offers users interaction across all channels that remains consistent each time. It also allows banks to design services based on what their consumers need.
As far as market influence goes, during the first three months of 2022 alone, Fiserv held fast against competitors, capturing a share of 40% when compared with leading core banking processors.
Oracle FLEXCUBE is a helpful and adaptable platform used mostly by banks. It enhances their work in areas like retail, company banking, Islamic banking, microfinance, and special finance firms. This platform helps improve the work processes of these institutions, making them smoother and less expensive due to machine-learning-based insights.
FLEXCUBE aids banks as they adjust to the quickly changing world of digital bank services. Through this platform, banks can safely cooperate with other service providers while maintaining control over their specific working environments.
What makes FLEXCUBE unique is its capability to speed up operations across multiple banking services while also growing businesses effectively. With FLEXCUBE, older traditional systems get upgraded using newer technology solutions like cloud storage.
As of 2023, more than 970 companies use Oracle FLEXCUBE in their management techniques, supporting around 10,000 funds from a single source, which provides support for nearly 10 million accounts all at once in some cases.
Fidelity National Information Services (FIS) is a key banking platform that helps to blend with banks’ main systems easily with its flexible solutions. So, what does it do? Well, it provides high-level banking services that improve business activities.
Banks apply FIS to create advanced banking platforms. This lets them either update their original banking platform bit by bit or start and develop a fresh one using the latest online banking base. With powerful digital tools from FIS, financial companies can control portfolios, introduce new products, and remain up to date in this fast-changing market.
How is FIS different then? The answer lies in its unique structure that’s open and adjustable — perfect for quickly building an updated bank. Plus, it offers complex analytics, and all its functions are fully API-enabled.
As of February 2024, the overall value or net worth of FIS is expected to stand at $38.08 billion, while the commercial value was set at $56.27 billion. The company involves more than 55k employees spread over more than 50 nations worldwide and offers over 450 solutions.
In plain terms, Backbase is a sophisticated program that banks use to streamline their services. Thanks to this platform, financial businesses can improve how they interact with customers while revamping their operations.
The beauty of Backbase lies in its power to take apart old systems and build fresh customer-focused structures around them. This lets banking institutions enhance important customer experiences across various landscapes and do away with isolation between departments.
Backbase stands out due to its customizable features which give banks the freedom to concoct unique client experiences. The platform comes equipped with ready-to-use software that is able to fulfill the majority of what’s needed for an advanced mobile or web application by banks.
A peek into numbers tells us that globally, about 2000 people are onboard Team Backbase. Over 120 finance firms around the world have welcomed it as an integral part of their operations.
Finacle is a banking program created by Infosys that works through the Internet. Its main job is to modernize important features of banking. It does this by providing many different features, such as flexible product platforms product building, handling, and extensive parameterization. The goal of all these services is to boost growth through innovation.
Banks rely on Finacle for their digital plans because it gives them a strong base to work from. It helps banks manage workflows across different programs easily, saving not just effort but also time and cash.
Finacle stands out from other similar solutions with its great design, real-time processing engine, open application programming interfaces (APIs), and built-in customer insights. Finacle speeds up making new products and adopting digital methods because it’s very modular in design—a trait that sets it ahead compared with competitors.
In 2023, banks in about 100 countries used Finacle, which benefited more than 1 billion customers worldwide. Over 1300 clients trust it for delivering quicker, safer, customized core banking services.
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Forbis isn’t just any banking software; it’s new and has everything a bank could need: flexibility, lots of features, ease of growth, and compliance.
Banks use Forbis when they want to change how things work because of all the technology updates happening around the world. It lets banks focus on their customers - create new services for them, find more people who could become clients, and understand what their customers think and feel about them.
What makes Forbis stand out is that it never stops learning or growing. They’re always researching and working on fresh ideas for helpful banking tech tools. No matter what a bank or financial institution needs or wants to follow in terms of regulation - they have an answer ready in one place.
Key Challenges with Core Banking Platforms
Core banking platforms serve as the base for bank operations. Still, they’re having major problems right now. These platforms are often made using legacy systems that can’t do certain things and have other issues, too. Complexity is a big issue, but so is the use of old technology and poor user experiences among others. These issues make it harder to compete with others because new ideas slow down while inefficiency grows. That’s why lots of banks are reviewing their core banking platforms again and finding solutions to these issues that will allow them to grow even more in the future. Here are some key challenges that banks face with banking platforms.
✧ Lack of Customizations
Banks are having trouble because they can’t change their main banking systems the way they want. Often, they find problems with old service contracts ending and lots of changes made over time that aren’t well explained - this makes the system hard to understand and risky to alter.
Regular banking systems also have a hard time dealing with new digital requirements like speedy transactions and fast product launches. This can slow down projects and make them more expensive because this would require creating unique solutions. Over the last ten years, only three out of every ten attempts to fully change these core banking systems have worked, showing how big this problem is.
✧ Excessive Complexity
Old technology in basic banking systems is also a big problem for banks. Many of these banks began with systems made over four decades ago for old banking methods. These outdated systems are often full of problems that slow down operations, make them easy targets for security threats, and restrict improvements to customer service due to their limited ability to integrate new things. These old platforms also get in the way when trying to keep up with fully digital competitors. Updating these dated setups usually requires a complete redo, which can be tough and long drawn out. It’s an expensive affair, too; updating attempts could cost well above $100 million, and they have a strong chance of not getting completed or having significant cost ups.
✧ Outdated Tech Stack
Customizing mobile banking apps is not easy, but it’s important. The app must fit a range of user needs, which means knowing what users want. It should let people pick and choose alerts, templates, and other features that they need. However, more choices can make the app harder to build, cost more money, and take longer to launch.
Yet customization is vital for keeping users happy, so they keep using the app. In fact, most people - about 89% surveyed - use mobile banking. And unsurprisingly, almost all young adults do, too, at a staggering rate of 97%! So, finding the right mix between customization and ease-of-use matters in building these apps.
✧ Poor Experiences
Banks may lose many customers when they don’t offer a good experience. A study by Salesforce showed that 57% of millennial customers would leave for financial services that offered better experience. The lack of personal touch in services doesn’t help either, with most banking firms failing to deliver this promise. This failure leads to unhappy and less engaged customers. However, the rules set up within the banking industry work against them. Sometimes, those interested in improving user experiences face limitations due to these rules, which can lead to their platforms becoming non-user friendly, as innovation struggles in such an environment. When it comes to old-style traditional banks, reluctance to change hinders new changes from happening, often blocking those who wish to be creative at solving customer-centric solutions.
✧ Lack of Modern White-Label Apps
Another challenge faced by banking platforms is the lack of modern white-label apps. This can limit a bank’s growth and slow down how they respond to changing markets. If a bank only has its own homemade app, it might not work well for the customer’s needs. The speed at which new products enter the market may slow down if banks have to make every app on their own from the start. These homemade apps could also cost too much and require lots of money for upkeep compared with using white-label apps that cut costs and ease maintenance worries.
However, sometimes customers may have bad experiences using poorly made white-label apps, which can negatively impact their view of the company. Regulatory matters also rear their head because banking software must meet legal requirements, which sometimes take time to be approved, causing possible legal problems later on.
✧ Scalability Limitations
Another challenge is the lack of scalability factors. Banking platforms, often built on legacy frameworks, are old and may find it hard to keep up with what modern banking needs. If a bank cannot grow well, it may not succeed or compete properly. In contrast, modern platforms allow for growth and increase efficiency.
For example, new types of banks and fintech companies use fresh technology designs, which work better plus help in scalability. About 70 percent of all banks are reviewing their core platforms due to this growth factor, according to a McKinsey study. As such, for any bank wanting to remain competitive and achieve future goals, solving these growth problems is key.
✧ Integration Challenges
Integration challenges in banking platforms pose threats to operational efficiency, cost-effectiveness, and customer experiences. The struggles come mostly from old legacy systems that need additional integration to work with new apps. It also includes issues with data not matching across the platform, which makes combining them harder. Sharing data can make banks vulnerable to cyber-attacks. Slow progress in creating custom integrations can push back the release of new features.
Keeping up to date with technology and regulations increases the overall expense for a bank. Building skills in integration takes effort and costs time. To fix these problems, banks need modern platforms that integrate smoothly; good policies around managing data could help, and focusing on safety is important, too. Working with specialized partners or using cloud-based solutions will speed things up and get better results in terms of integrating various processes
Conclusion
In summary, it’s evident to us how much technology is changing the shape of banking. Core banking software, a big part of modern banks, has changed a lot to meet what the industry needs. We have looked at basic definitions for this area. We also studied current market changes and new tech trends in core banking.
We carefully listed out the top 10 core bank platforms that will help financial organizations improve their work and want to scale up in the future. However, innovation isn’t easy; setting up new banking software platforms, updating old ones, keeping them safe from cyber security threats, and maintaining them brings problems. During these times when everything is changing so fast, the banking sector also needs to adapt to the changing market trends to ensure growth.
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