skaleet.com Open in urlscan Pro
75.2.60.5  Public Scan

Form analysis
0 forms found in the DOM

Text Content

Skaleet
Contact Us
   
 * Solution
 * Customers
   
   Customers
   
      
    * Market Segments
    * Use cases
      
   
      
    * Neobanks
    * Universal Banks
    * PSP
    * BaaS
      

 * Partners
   
   Partners
   
      
    * Partnership Program
    * Our Partners
      

 * Insights
 * Company
   
   Company
   
      
    * About Us
    * Career
      

   
 * Contact Us

EN
   
 * FR
 * EN
   

   
 * Solution

 * Customers
   
      
   
    * Market Segments
      
         
       * Neobanks
       * Universal Banks
       * PSP
       * BaaS
         
   
    * Use cases
      
         
       * BaaS to SaaS
       * Switching Core Banking
       * Greenfield
         
   
      

 * Partners
   
      
    * Partnership Program
    * Our Partners
      

 * Insights

 * Company
   
      
    * About Us
    * Career
      

   

EN
   
 * FR
 * EN
   

January 19th, 2023 • Core Banking by Marketing Skaleet


CORE BANKING SYSTEM: WHAT IS IT?🔎



The financial sector is undergoing technological changes that offer great
potential for improvement. Therefore, it’s not surprising that Core Banking is
now at the heart of financial institutions’ digital transformation. An overview
of the Core Banking System is necessary to understand this phenomenon!

 


WHAT IS A CORE BANKING SYSTEM? 🔎


CORE BANKING SYSTEM: DEFINITION

Core Banking is the computer system (software) used to process and manage bank
and financial institutions' operations. It includes different modules: account
management, payments, loans, accounting, onboarding (KYC/KYB), and anti-money
laundering (AML-CFT).

Today, there are different types of core banking. Among them is the Core Banking
System. The term "system" refers to the legacy. In other words, a Core Banking
System is a Core Banking technology solution inherited from the 1980s-1990s.

 


CORE BANKING SYSTEM: ARCHITECTURE

Traditional Core Banking Systems are mainly built on a monolithic architecture,
i.e., they’re made up of a single autonomous and independent technological block
based on a single code base. The evolution of this type of software is,
therefore, particularly complex, costly and time-consuming: it requires updating
the entire technology.

Moreover, most of the monolithic architecture components are developed in COBOL.
Created in 1959, this computer language is still widely used in critical
infrastructures, such as banks and financial institutions, even though fewer and
fewer developers master it.

 


CORE BANKING SYSTEM: INFRASTRUCTURE

Most traditional Core Banking Systems have an on-premises infrastructure, i.e.,
hosted on a mainframe. This infrastructure requires the solution installed on
the institution's servers, which takes care of maintenance, updates, backup,
security, and system renewal. It thus generates significant maintenance costs
and is difficult to upgrade.

 


CORE BANKING SYSTEM: AN OUTDATED MODEL? 🥀


CORE BANKING SYSTEM: THE LEGACY’S LIMITS

Because of its architecture and infrastructure, the Core Banking System hinders
financial institutions' service scalability. Monolithic technologies are stable
(for the most part) but inflexible and slow to evolve. This makes it difficult
for financial institutions to comply with new regulations or develop new
products/services and enhance the customer experience. The products designed on
Core Banking Systems are mature and generic but difficult to customize to meet
new use cases.

Core banking systems also lack performance in data storage and exploitation. In
addition, legacy systems have strong business logic and store data in silos.
These characteristics make it challenging to create interrelationships between
customers and products and result in duplicate data within the system.

In short, although it allows financial institutions to process their historical
activities satisfactorily, the Core Banking System is now proving unsuitable
because it cannot claim the scalability that the current context requires. With
the legacy system, it’s impossible to meet new customer expectations (fluidity,
personalization, innovation, etc.) and demands from regulators (monitoring and
production of real-time information, among others). It’s also challenging to
keep up with the competition and catch up with FinTech introducing new
practices, standards, and business models.

Many financial institutions are aware of the need to modernize their systems.
However, several factors have prevented them from taking the plunge. Cost,
delays, service disruption, technical migration issues... In this context, banks
and financial institutions often prefer to stick with their legacy platform to
execute daily operations. But today, technological innovations are shuffling the
deck.

 


CORE BANKING PLATFORM: NEW OPPORTUNITIES 🚀

Since the 1980s-1990s, a lot has changed! A new type of core banking has
appeared in the financial ecosystem: the Core Banking Platform.

Core Banking Platforms are designed to be modular, which means that transaction
management functions are independent of banking services such as account
creation, loan management, deposit and withdrawal management, and other
management activities. This modular architecture enables localized changes that
are faster and easier to test and launch. It also improves settings and
scalability by providing additional services to financial institutions using
API.

The Core Banking Platform's orchestrator approach also enables new modern
digital capabilities to grow and avoids the restrictions of Core Banking
Systems. This new approach accelerates the transition and reduces risks. The
Core Banking Platform's real-time data hub and routing layer are based on an
event-driven architecture (EDA). This makes intelligent data transaction routing
and choreographing API management easier while preserving data from core banking
systems and ensuring its integrity. This provides the development of modern
digital experiences and innovative applications in all areas: retail banking,
payment cards, loans, and credits...

 

Read also: Core Banking Systems vs. Core Banking Platforms: why switch to a
next-generation solution?




CORE BANKING SYSTEM: HOW TO REPLACE IT?

When planning technological investments, many financial institutions focus on
developing front ends such as their website, mobile application, and
multi-channel. While this has allowed them to extend the life of their core
banking system, it’s not a long-term solution.

The Core Banking System modernization, including the integration of a Core
Banking Platform, must now be reconsidered. And this is all the more obvious as
the costs of running and maintaining Core Banking Systems are increasingly
important, sometimes even equivalent to implementing a new Core Banking
Platform. The next logical development step is to migrate to a Core Banking
Platform, which will provide speed, agility, and scalability.

However, any migration involving a large-scale project is costly and
time-consuming. To meet this challenge, financial institutions need to take a
strategic and technical approach by hollowing out their existing Core Banking
System while testing multiple Core Banking Platforms on parts of their product
portfolio. This process can be tricky, and the ROI is difficult to measure, but
it’s undoubtedly the best option.

 

Read also: 7 tips to choose your new Core Banking.

 

Skaleet is here to support you in this complex but strategic transition by
experimenting with its Core Banking Platform as part of a project, or a product
launch in a Test & Learn approach. This way, you can test the Platform, get new
customers and migrate gradually. Would you like to know more? Contact us for
more information!

   

 * #innovation

 * #fintech

 * #banking

 * #corebanking

   

Share this article on

 * 
 * 


YOU MIGHT ALSO BE INTERESTED IN ...

Innovation. FinTech. Digital Banking. Neobanks. Open Banking. Core Banking.
Cloud. 

January 12th, 2023 • Core Banking by Marketing Skaleet


BANKING AS A SERVICE, BANKING AS A PLATFORM, OPEN BANKING, CLOUD BANKING… THE
BIG LEXICON OF FINANCE 4.0! 📖

With the emergence of new banking business models and the...

Read the article
   


 * CUSTOMERS
   
     
   
   
   * MARKET SEGMENTS
     
       
     * Neobanks
     * Universal Banks
     * PSP
     * BaaS
       
   
   
   * USE CASES
     
       
     * BaaS to SaaS
     * Switching Core Banking
     * Greenfield
       
     


 * SOLUTION
   
     
   *   
     * Solution
       
     


 * PARTNERS
   
     
   *   
     * Partnership Program
     * Our Partners
       
     


 * INSIGHTS
   
     
   *   
     * Blog
       
     


 * COMPANY
   
     
   *   
     * About Us
     * Career
       
     
   

HOW CAN WE HELP YOU ? CONTACT US.

   
 * LinkedIn Skaleet
 * Twitter Skaleet
 * Youtube Skaleet
 * Medium Skaleet
   

Copyright © 2023 Skaleet. All rights reserved.

Privacy policyEthics - Compliance