This research is presented by GBO, a renowned corporate services provider.

We specialize in various banking, corporate, and B2B services, particularly for high-risk industries. Our areas of expertise include banking solutions for gaming, licensing, system management, and expert advisory services

 

Gartner defines a core banking system as a back-end system that processes daily banking transactions and posts updates to accounts and other financial records.

 

 

Banking as a Service working in the digital economy are a central distinguishing feature separating the banks that are leading in the transition over to modern services from the rest of the more traditional banks.

Internet banks are serving customers at around one third of the cost-per-transaction of traditional banks and so are winning a much larger share of the market. Being able to launch software for banks’ core banking activities quickly is a critical competitive advantage for the types of core banking systems in the current marketplace because customers increasingly expect personalized service and want it in real-time.

Core banking platform providers

Name Category Country Description
1 Jack Henry Banking banking software United States Jack Henry Banking is a leading provider of the integrated technology platforms banks need to process financial transactions, automate business processes, and manage mission-critical customer and business information
2 Unisys IT infrastructure United States Unisys is a global IT solutions provider for digital workplace, cloud, application, infrastructure, enterprise computing and business process solutions.
3 FIS Modern Banking Platform cloud-native core banking platform UK with FIS® Modern Banking Platform, a cloud-enabled, componentized, open and secure solution designed with API-first functionality
4 SmartBanker BI banking United States As the first full-service solution of it’s kind, SmartBanker uses data-driven insights to automate actions and increase customer profitability for financial institutions of all sizes.SmartBanker is a self-learning "action trigger" platform.
5 Mambu software-as-a-service, cloud-native, Germany Mambu is a German software company founded in Berlin and headquartered in Amsterdam. Mambu provides infrastructure for banks and financial service providers according to the software as a service model. In December 2021, Mambu reached a company valuation of $5.3 billion, making it one of the unicorns of Germany.
6 Thought Machine cloud-native core banking platform UK We designed the system from scratch to give our clients total choice, flexibility and power. The world's top banks have adopted the Vault platform as the foundation layer of their technology stack.
7 Banc724 cloud-native core banking platform India Zenith Software is a leading provider of end-to-end, integrated banking software solution. We offer a suite of integrated and modular products for retail, corporate, Rural Banks, PACS and microfinance institutions.
8 csiweb cloud-native core banking platform United States Our cloud-based core banking solution simplifies bank operations and provides the foundation for everything you do, from onboarding and servicing loans to processing withdrawals and deposits
9 Virmati Software cloud-native core banking platform India Be it changing consumer preferences, changing business models, changing strategies for efficiency, changing regulatory environment or changing competitive scenario, Virmati’s offerings are right there to enable the Banking & Finance Institutions to stay nimble, to adapt, be robust & stay on the top of their game.
10 Data Mate from DataVision cloud-native core banking platform India Datavision is your partner for Banking Software Products and solutions. We are an ISO 9001-2008 organization and have been assessed for CMM Level 5
11 Fiserv cloud-native core banking platform United States Fiserv bank platforms are a technology foundation for financial institutions of every size and business model, domestic and international. Enjoy cost savings while providing the best possible experience for employees and customers when you choose a Fiserv banking solution. Our integration environment empowers you to deliver new solutions and services more quickly and efficiently, creating a truly unified cross-channel customer experience.
12 Finastra Fusion cloud-native core banking platform United States Next generation banking platform solutions that drive innovation with the agility of the cloud and reach of an open, end-to-end eco-system
13 NCR Corporation Digital banking core platform United States NCR Corporation
14 Temenos T24 Transact cloud-native core banking platform Switzerland Temenos Transact is the most successful and widely used digital core-banking solution in the world. Using cloud native and agnostic technology, Temenos Transact provides the most extensive and richest set of banking functionality across retail, corporate, treasury, wealth and payments with over 1000 banks in 150+ countries relying on it to provide market leading and innovative products and services to their customers.
15 sap cloud-native core banking platform Germany Banks that drive digital transformation are using data in the cloud and intelligent technologies to lower costs and maximize speed while improving the customer and employee experience

Competition in the banking industry is intensifying. Fintech are working best by targeting weaknesses in the portfolio of services provided by the conventional banks. As a result, even though having been in operation for only a few years, some of the big fintech entities have already accumulated large customer bases, and pose a real threat to the balance of the sector.
The fintechs are growing their businesses and attracting customers with the help of modern core banking solutions, which enables them to innovate faster and operate more efficiently.

 

Cost and speed of application development for core banking system architecture providers is probably more important than anything else. For conventional banking systems banks may be spending as much as two-thirds of their system upgrade budgets on catch-up alone. Dealing with older legacy systems associated with manual deployment and traditional manual operational processes combine to keep costs high.

For the banks, there is some light at the end of the tunnel. A new generation of cloud-native core banking platforms is emerging, such as Mambu, 10X, Thought Machine, and FinXact, as well as products from the traditional core platform vendors.

 

These promise to help banks radically modernize and accelerate the benefits through higher developer productivity and removal of technical hurdles. They can achieve further efficiencies by leveraging cloud-based services, which enable them to deploy new products and scale infrastructure quickly, and use development tools that support automation.

  • Modern platforms support integrated data sets and single sources of information, which in turn create the ability, in real-time, to offer personalized experiences to the customers in the user interface, at the same time as running advanced artificial intelligence analytics for more accurate decision-making.
  • Conventional banks are following this course of action because they urgently need to replace their core platforms due to obsolescence and because of changed regulatory standards. One strategy being adopted by some banks is to retain their legacy platforms but progressively minimizing their importance, while developing or acquiring replacement systems that will eventually take over full functionality.

 

This is seen as a safer and less expensive option rather than investing heavily in upgrading the legacy systems.
Spending on core banking systems over the current year or two is going to be substantial. Most banks have earmarked substantial budgets of the order of $10 million or more for 2022, with around a fifth planning to invest as much as $40 million,as reported in a survey.

 

Core Banking Software providers

Banking software is the engine that powers the creation and management of customers’ accounts and transactions. In the digital banking environment, storing client’s data and all associated transactions, and the reporting tools necessary to allow decoupled distribution across multiple channels must provide a smooth digital customer experience.

Payment processing, digital credit/debit cards and KYC services must be integrated into the core banking software. The best banking core software providers work with fully-integrated BaaS products with all of the required key features to help assemble best-in-class services and launch them much faster and with far lower costs.

The following is a concise list of the top core banking vendors outside of the US, based on our investigation into their market share, product depth, reputation, service and experience.

You should use this list as a guide, and we recommend you talk to our team of specialists here at Money-Gate before making any choice.

One of the specific features in the list of top core banking vendors that we used in making this selection of the best online banking platform providers is for the provision of cloud-based core banking systems that are fully integrated with the vendor’s other systems. The future of digital banking is totally tied to cloud based core banking solutions, and any banking service provider that leaves out cloud based core banking systems will have to play catch-up later, at higher cost and with weakened market penetration.

Best core banking system providers

There are many core banking system providers that offer a range of products and services to support the operations of banks and other financial institutions.

 

Some examples of well-known core banking system providers include:

Finastra: Finastra is a leading provider of financial software and services, with a focus on core banking systems. The company’s FusionBanking system is designed to help banks improve efficiency and reduce costs, and it offers a range of features including loan origination, account management, and regulatory reporting.

Temenos: Temenos is a global provider of core banking software and services. The company’s T24 system is used by banks and other financial institutions around the world and offers a range of features including account management, lending, and risk management.

FIS: FIS is a global provider of financial technology and services, including core banking systems. The company’s Profile core banking system is designed to support the full range of banking activities, including account management, lending, and payments.

Infosys Finacle: Infosys Finacle is a provider of core banking software and services, with a focus on digital transformation. The company’s core banking system is designed to support a range of banking activities, including account management, lending, and risk management. When choosing a core banking system provider, it is important to consider factors such as the provider’s reputation, the features and capabilities of the system, and the level of support and service offered. It may also be helpful to compare the offerings of multiple providers and seek recommendations from other banks or industry experts.

 

What is cloud-based core banking system

A core banking system that is hosted on remote servers and accessed online is known as a cloud-based core banking system. It is a contemporary method of managing a bank’s core functions and services. The management of customer accounts, transactions, loans, and other crucial banking operations is made possible for banks by the scalability, flexibility, and affordability of this type of system.

A cloud-based core banking system primarily consists of:

  • Servers located in data centers run by independent cloud service providers like Amazon Web Services, Microsoft Azure, or Google Cloud Platform house the bank’s main banking software.
  • Internet access: Secure internet connections allow banks and their customers to access the core banking system, enabling real-time processing and information sharing.
  • Managing fundamental banking operations like account opening, deposits, withdrawals, loans, payments, and interest calculations fall under the purview of core banking software. For managing customer accounts and transactions across various branches and channels, it offers a centralized platform.
  • Security and adherence to industry regulations: Cloud-based core banking systems are created to guarantee the highest standards of security, privacy, and adherence to rules set forth by the Payment Card Industry Data Security Standard (PCI DSS) and the General Data Protection Regulation (GDPR), respectively (GDPR).

Benefits of a core banking system in the cloud:

  • Scalability: Cloud-based systems are easily expandable, enabling banks to add new branches, goods, and services without having to make sizable infrastructure investments.
  • Savings: Since banks no longer have to maintain and manage their own servers and data centers, using a cloud-based system allows them to lower their IT infrastructure costs.
  • Flexibility: Banks can quickly adapt to shifting market conditions, roll out new products, or implement updates and enhancements thanks to the increased flexibility provided by cloud-based core banking systems.
  • Better customer experience: Cloud-based systems’ real-time capabilities and seamless integration give customers instant access to their accounts and transactions through a variety of channels, including online banking, mobile apps, and ATMs.
  • Improvements in security and dependability: Cloud service providers make significant investments in security safeguards and infrastructure redundancy, which frequently leads to improvements in security and dependability compared to conventional internal systems.
  • Despite these benefits, switching to a cloud-based core banking system may cause some banks to worry about data privacy, security, and regulatory compliance. However, these issues are continuously being addressed thanks to ongoing developments in cloud technology and the growing use of cloud services in the banking sector, making cloud-based core banking systems a desirable choice for contemporary banks.

What is core banking as a service?

Core banking as a service (CBaaS) is a model in which a financial institution outsources the management and operation of its core banking system to a third-party provider. The provider offers access to the core banking system and related services on a subscription or pay-per-use basis, allowing the financial institution to benefit from the latest technology and expertise without the need to invest in and maintain its own system.

 

CBaaS can offer several benefits to financial institutions. By outsourcing the management and operation of the core banking system, institutions can focus on their core business activities and reduce the burden of maintaining and updating their own systems. CBaaS can also help institutions to reduce costs, as they only pay for the services they use and do not need to invest in and maintain their own systems. Additionally, CBaaS providers often have access to the latest technology and expertise, which can help institutions to stay up-to-date and competitive.

 

There are a number of providers that offer core banking as a service, and financial institutions can choose a provider that meets their specific needs and requirements. When evaluating a CBaaS provider, it is important to consider factors such as the provider’s reputation, the features and capabilities of the system, and the level of support and service offered. It may also be helpful to compare the offerings of multiple providers and seek recommendations from other banks or industry experts.

 

The top 10 banking software companies in the world, ranked by revenue and market share:

  1. Finastra – UK/USA-based financial services software company, formed by the merger of D+H and Misys in 2017. Provides a wide range of banking software solutions, including core banking, lending, payments, and treasury management.
  2. FIS – US-based provider of banking and payments technology solutions. Offers a range of software solutions, including core banking, wealth management, fraud detection, and mobile banking.
  3. Temenos – Swiss-based provider of banking software solutions. Offers core banking, payments, wealth management, and customer engagement solutions.
  4. Infosys Finacle – Indian-based banking software provider. Offers core banking, lending, treasury, and wealth management solutions.
  5. NCR – US-based provider of financial technology solutions, including ATMs, software, and services. Offers banking software solutions for retail banking, payments, and ATM management.
  6. Oracle Financial Services – US-based provider of software solutions for financial institutions. Offers core banking, payments, lending, and risk management solutions.
  7. SAP – German-based provider of enterprise software solutions. Offers banking software solutions for core banking, payments, and analytics.
  8. Backbase – Dutch-based provider of digital banking software solutions. Offers customer experience solutions for retail and business banking.
  9. ACI Worldwide – US-based provider of payments technology solutions. Offers banking software solutions for payments, fraud detection, and risk management.
  10. TCS Financial Solutions – Indian-based provider of banking software solutions. Offers core banking, payments, wealth management, and risk management solutions.

What are the top core banking products?

There are many core banking products available from a range of providers, and the top products will depend on the specific needs and requirements of the financial institution.

When choosing a core banking product, it is important to consider factors such as the provider’s reputation, the features and capabilities of the system, and the level of support and service offered. It may also be helpful to compare the offerings of multiple products and seek recommendations from other banks or industry experts.

 

What are Core banking system components?

Core banking systems are software platforms that support the core activities of banks and other financial institutions, including account management, lending, and payments. These systems are typically made up of a number of components that work together to support the operations of the financial institution. Some examples of components that may be included in a core banking system include:

  1. Account management: This component is responsible for managing customer accounts, including opening, closing, and maintaining accounts, as well as tracking account balances and transactions.
  2. Lending: This component supports the process of issuing loans and other types of credit to customers, including underwriting, loan origination, and servicing.
  3. Payments: This component supports the processing of payments, including the acceptance of various types of payment instruments, such as checks and credit cards, and the settlement of transactions.
  4. Risk management: This component helps the financial institution to manage risk by monitoring and analyzing data on customer accounts and transactions, and by implementing controls and processes to mitigate risk.
  5. Reporting: This component generates reports on various aspects of the financial institution’s operations, including financial performance, compliance, and risk.
  6. Integration: This component allows the core banking system to connect with other systems and platforms, such as those used for customer relationship management, accounting, and regulatory reporting.

The specific components included in a core banking system will depend on the needs and requirements of the financial institution, and may vary from one system to another.

 

Advantages and disadvantages of core banking system

Core banking systems are software platforms that support the core activities of banks and other financial institutions, including account management, lending, and payments. These systems are typically made up of a number of components that work together to support the operations of the financial institution.

There are several advantages to using a core banking system:

  1. Efficiency: Core banking systems can help financial institutions to streamline their operations and improve efficiency, as they provide a central platform for managing customer accounts, processing transactions, and generating reports.
  2. Cost savings: By automating many of the manual processes involved in banking, core banking systems can help financial institutions to reduce costs.
  3. Improved customer service: Core banking systems can help financial institutions to better serve their customers by providing a range of self-service options, such as online banking and mobile banking, and by enabling faster and more accurate processing of transactions.
  4. Enhanced security: Core banking systems often include advanced security features, such as encryption and authentication, to protect against fraud and unauthorized access.
  5. Improved data management: Core banking systems can help financial institutions to manage and analyze data on customer accounts and transactions, which can be useful for making informed business decisions and identifying trends.

However, there are also some potential disadvantages to using a core banking system:

  1. Initial cost: Implementing a core banking system can be expensive, as it requires significant upfront investment in software, hardware, and training.
  2. Complexity: Core banking systems can be complex to set up and maintain, and may require specialized knowledge and expertise.
  3. Dependency: Financial institutions that rely on a core banking system may be vulnerable if the system experiences technical issues or outages.
  4. Inflexibility: Core banking systems can be inflexible and may not be able to accommodate custom requirements or changes to business processes.

Ultimately, the decision to use a core banking system will depend on the specific needs and circumstances of the financial institution. It is important to carefully consider the potential advantages and disadvantages before making a decision.

 

Microsoft banking software

Although Microsoft doesn’t have a specific banking software product, they do provide a number of services that banks and other financial institutions may find useful. As a potential customer, the following Microsoft goods and services may be of interest to you:

  • Microsoft Azure: Azure is Microsoft’s platform for cloud computing, offering a variety of services and solutions to assist businesses with their computing and storage requirements. Azure is a secure and scalable platform that banks can use to host their core banking systems, payment platforms, and other financial applications.
  • Microsoft Dynamics 365: Dynamics 365 is a collection of commercial software that can assist banks in managing their clientele, business finances, and risk. Banks can manage loan and credit applications, keep track of customer interactions, and perform real-time financial data analysis with Dynamics 365.
  • Microsoft Power Platform: Power Platform is a low-code platform that enables banks to create unique business workflows and applications without the use of a lot of coding. Banks can integrate data from various sources, automate processes, and create dashboards and reports using Power Platform.

 

Microsoft Teams is a platform for collaboration that can help banks enhance teamwork and communication. With Teams, bank employees can hold video meetings, share documents, and collaborate in real-time. Using Microsoft Power BI, banks can analyze and visualize financial data. Power BI is a data visualization tool. Banks can use Power BI to build unique reports and dashboards that track key performance indicators, track risks, and spot opportunities. Overall, banks can enhance their operations, streamline their procedures, and maintain competitiveness in a market that is changing quickly thanks to Microsoft’s solutions. Microsoft offers a variety of solutions that can satisfy your needs, whether you’re looking for cloud computing, customer relationship management, business analytics, or collaboration tools.

 

 

About the Author: Gilad Oren

Founder & CEO of GBO International Financial Services, with 25+ years in finance and online marketing. Former private banker turned entrepreneur, specializing in global corporate services for gaming and crypto sectors. Expert in integrating traditional finance with innovative fintech solutions. Let's connect in LinkedIn: https://www.linkedin.com/in/gilad-oren-326231220/

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