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.
