What Is Core Banking Solution (CBS)?

Updated On : November 2024

Today Banking as a business has grown tremendously and transformed itself from only a deposits taking and loan providing system to an institution which provides an entire gamut of products and services under a wide umbrella. All such activities commenced by a bank is called Core Banking.

As per pure definition Core banking refers to a centralized system established by a bank which allows its customers to conduct their business irrespective of the bank’s branch. Thus, it removes the impediments of geo-specific transactions. In fact, CORE is an acronym for "Centralized Online Real-time Exchange", thus the bank’s branches can access applications from centralized data centers.

Other than retail banking customers, core banking is now also being extended to address the requirements of corporate clients and provide for a comprehensive banking solution.

Core banking solutions offer the following advantages to the bank:

• Improved operations that address customer demands and industry consolidation
• Errors due to multiple are now eradicated
• Easy ability to introduce new financial products and manage changes in existing products
• Seamless merging of back office data and self-service operations
• Dismal manual banking operations
• Simpler data assessment, management, and upgrade
• Increased staff productivity and efficiency and effective use of labour and skills
• Access to information quickly and easily encourages quick decision-making
• Strengthen communications with customers

Minimum features of Core Banking Solution:

• Customer-On Boarding.
• Managing deposits and withdrawals.
• Transactions management
• QR-based payments
• Chatbot integration
• Advanced security integration
• Accounts management
• Secure data management
• Interest. Calculation and management
• Payments processing (cash, cheques /checks, mandates, NEFT, RTGS, etc.).
• Customer relationship management (CRM) activities
• Designing new banking products
• Loan disbursal and management
• Establishing criteria for minimum balances, interest rates, the number of withdrawals allowed, and so on
• Mobile applications
• Digital cash management

Customers find core banking advantageous since:

• Thanks to mobile apps, customers can access their accounts wherever they are. This increases accessibility and satisfaction with banking.
• Accuracy, timely, and actionable information about customer relations
• Single view between bank and customers
• Making payments with credit cards, paying bills, and making online purchases are all made simpler by digital cash management.
• As simple currency transactions can be completed online, they are quick, safe, and simple to complete.
• The entire range of banking products, including savings, deposit accounts, etc., are available from any location.

How does Technology Boost Core Banking Solutions?

Technology provides efficient, reliable, innovative services in CBS by automating numerous banking processes. Whether it is account management or transaction handling, it reduces manual effort as well as mistakes and contributes to increased operational efficiency as well as speed.

With technology's assistance, CBS is able both to carry out and continually revise transactions in real time, providing an up-to-date account information. Moreover, modern technology makes it possible for CBS to safely manage and process vast amounts of information while delivering a high quality experience to customers.

Recent Core Banking Solutions Data and Trends

• Projected to grow at a CAGR of 16.73% from FY2024 to FY2032 .
• Key drivers include increased financial inclusion, technological advancements, regulatory compliance and scalability.
• Growth of global FinTech markets strengthening fintech investments.
• Cloud adoption and deployment alongside on-premise solutions.

In conclusion, Core Banking Solutions have emerged as the technological backbone of modern banking operations and will continue to evolve as technology advances, especially in the cloud computing space. With the projected CAGR of 16.73% by FY2032 , it is clearly a critical driver of banking innovation, enabling financial entities to maintain security, scalability and compliance in this ever-evolving financial ecosystem.

Nelito’s FinCraft^TM Core Banking Solution

The FinCraft^TM Core Banking System provides integrated solutions for retail banking, corporate banking as well as has features supporting Trade finance, Loan management system. It is an enterprise banking solution that enables Banks to provide full range of banking services and content to customers with different user profiles, efficiently and reliably.

Reference:
https://www.marketsandata.com/industry-reports/india-core-banking-software-market