New core software can clean up the mess currently made from outdated tech – this is the year to migrate and select a new core banking system.
Simply put, legacy systems are outdated and ineffective when compared to modern platforms. Banking technology services have evolved at breakneck speeds, and advanced software solutions offer far more benefits than the rigid architecture of days past.
To complicate the matter, some legacy systems still use core software built over thirty years ago. The patchwork of API designations and data silos spread across several different programming languages makes for a haphazard core system.
Yes, core migration and software build-ups take time and effort. But for financial businesses, the cost-saving opportunities, integration possibilities, and overall resilience to economic movements that core banking software provides cannot be ignored. As Financial Brand stated: the banks who refuse to migrate away from limited technology will fall behind.
Switching core banking systems is a difficult task, but now is the time to make the shift.
Core Banking Service Criterion
Not all core banking systems are the same. Each service provides different application solutions, so you need a checklist that notates the best selection features.
The core system you adopt affects all aspects of your business, so the structure needs to implement smoothly in order to avoid business delays and any extra expenses.
We made this checklist to help you with your search. Use the following four selection criteria to locate the most optimal core system for your business:
1. Functionality
Each core banking service needs proper built-in functions to meet user demand.
Client preference can shift without notice, and the increase in fintech solutions puts pressure on digital applications to handle any market variance. Select a core service that comes with the functionality to meet your business needs.
Standard Bank Function
The basic bank controls must work without flaw. Look for platforms that manage seamless bank operations such as card issues, account openings and retrievals, transfers, payment processing, and IBAN Generation.
Ledger Operations
Reporting is an oft-overlooked process. Any financial institution needs detailed ledger accounts and generalized balances for compliance and stable economic growth.
Visualization is also crucial – ensure that the service you choose can generate reports that export digitally.
Front End White Label Platforms
The available software integrations are countless, and each program offers an enhanced customer experience.
The UX of the front end application is crucial. To limit the time spent rolling out software solutions to market, select a white label service. A system that offers customized software can save up to six months of development time when compared to custom-built API’s.
Save yourself the hassle, and gain marketing flexibility with white label systems.
2. Componentization
Componentization splits the coded software into manageable pieces, which can help improve product development speeds.
Having well-designed segments of software promotes technical reliability, and it encourages collaboration with developers.
A bank can make rapid changes to market demand by switching out component pieces. Look for these componentization elements from your core banking service.
Component Transfer
Core migrations used to take years to implement. Now, the transfer can occur within a business year.
To help streamline that process, a high-level core banking system will transfer the software in component pieces.
You can incorporate segments over time, which lowers training time and reduces error. A component transfer limits current disruptions to any banking services.
Solution Simplicity
Software built from modules reduces overall complexity. While functionality must be present, a core banking system with a focus on component simplicity streamlines all integrations.
Many core systems need overlaid stacks to work, and without a simplified structure, the entire process can break apart.
Search for a banking system solution that can swap software partners with ease.
Component Automation
KPMG released a survey that outlined the increase of manual labour in IT services, a move up to twenty-five percent of total staff.
A core banking system that incorporates automation can reduce that expense.
Automation also accelerates update times on stable programs, and component-based developers can program software performance improvements in real-time across different servers.
3. Microservice Architecture
The technical parameters of each core banking service are central to your selection criteria. How well the back end of any application functions will drastically improve company efficiency.
The programming language and the original source code props up the entire system – finding a healthy architecture supports cost-effective system operation.
Open Source Tech
Legacy technology cannot subsume programs outside its program language.
To sidestep this problem, outdated systems layer new coding language on top of the old, making a convoluted and slow program.
Some core banking systems use language that date back to the ‘50s, such as COBOL or stand JAVA. Select a core banking system that uses up to date, user-friendly coding language.
Integrations
Open source tech offers base code that can include a variety of API’s. A core banking system should be able to integrate with a wide variety of third-party digital solutions.
With easy integrations, any manner of application can connect directly into the core service. Take advantage of digital solutions and custom features with no system issues. Integrations also keep back end interfaces clean and usable.
Cloud-Native
A core banking service built on-premise is static in nature. Moving server function into cloud-ready applications never translates as it should.
Find a service built with a cloud-native architecture that can shift into cloud computing with ease. As more businesses move into cloud-based server storage, this is a significant aspect that your core banking service should support.
4. Technical Support and Price
Price
Price points for core banking services can vary to an immense degree.
Additionally, some pricing plans may seem attractive at face value, but they often include several in-app fees. Take note of the following hidden fees that can show up within a core banking service:
Hidden Fees to Watch For In Your Core Banking Service:
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Each core banking service has its own pricing and fee plans. Many services will adjust in price based on the included functionality.
Select a core banking service that fits your business strategy, then ensure that all fees and payment plans are disclosed. Since migration is such a difficult task, you do not want to shackle yourself with an expense-ridden platform.
Technical Support
You might need extended technical support to implement the core banking system.
Service systems are complex, and most businesses need in-depth backing to scale. Ask yourself if the hired service supports aggressive growth.
Look for update schedules given out by the provider, and double-check that they include all necessary security features.
Compliance and data protection are a requirement, so ensure that the core banking service includes high-level encryption. Customers expect continuous access to services, and they desire data privacy. A core banking service that presents a high level of technical support can decrease bugs and test malfunctions.
Ask The Experts On Core Banking Services
Core banking service migration can feel like a stressful affair.
Search for system functionality, componentization, high-level system architecture, and provider support pricing when selecting the core banking service that is right for you.
For more information, we would be happy to provide more details throughout the selection process. If you need direct guidance, click here to access our consultancy page – we will contact you shortly.
