Core Banking Solutions: Today, banking as a business has evolved a lot, and it involves the networking of various bank branches through a strong IT infrastructure. It allows customers to operate their bank accounts and avail banking services through a centralized network. And it has transformed from a mere deposit-taking and lending system to an institution that provides a whole range of products and services under one broad umbrella.
All such activities performed by the bank are called core banking. By its pure definition, core banking refers to a centralized system set up by a bank to allow its customers to conduct their business irrespective of the bank’s branch. Thus, it removes the barriers to geo-specific transactions. In fact, CORS is an acronym for “Centralized Online Real-Time Exchange”, which is how bank branches can access applications from centralized data centers. Apart from retail banking customers, core banking is also now being expanded to cater to the needs of corporate customers and provide comprehensive banking solutions.
Core Banking Solutions A brief history about
Until the 1970s, it took at least a day for a transaction to be reflected in bank accounts. This was because each bank had its own local server and the transaction data for each day was collected and sent in a batch at the same time.
In 1984, an initiative was taken regarding CBS with the ‘First Rangarajan Committee Report’, which highlighted the importance of banking computerization. Although many banks were initially reluctant to adopt software solutions, by 1994–1996 most of these had moved to CBS services.
Core banking solutions provide the following benefits to the bank
Improved operations that address customer demands and industry consolidation
Multiple entries ended up errors
Easy ability to introduce new financial products and manage changes to existing products
The seamless merging of back office data and self-service operations.
Minimum Features of Core Banking Solutions
to Establish.
Customer-on-boarding.
accounting management
transaction management
interest. calculation and management.
Loan disbursement and management.
Management of deposits and withdrawals.
Designing new banking products.
Customer Relationship Management (CRM) activities.
Criteria for minimum balance, rate of interest, number of withdrawals allowed, etc.
Payment Processing (Cash, Cheque/Cheque, Mandate, NEFT, RTGS, etc.).
Why is Core Banking Solutions important for banks?
Minimize the time taken for banking transactions.
Meet the increasing demands of your customers.
Simplify and accelerate basic banking processes so that banking employees can focus on other areas like upselling and cross-selling, marketing, etc.
Making banking services more accessible and convenient for customers
Which are the Core Banking Solutions Top Software Provider Companies?
Wipro Core-Banking
SAP Banking & Financial Services
oracle flexcube core banking
EdgeVerveFinnacle by Infosys Technologies Ltd.
Canopus AppSuite by Canopus Innovative Technologies
TCS FNS (Financial Network Services Limited) by TCS.
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FAQs
Q1: What is the primary purpose of Core Banking Solutions?
A: The primary purpose of Core Banking Solutions is to centralize and streamline all banking operations, providing enhanced customer services and operational efficiency.
Q2: Are CBS systems secure?
A: Yes, CBS systems are designed with robust security measures to protect customer data and ensure regulatory compliance.
Q3: What challenges do banks face when implementing CBS?
A: Banks often face challenges in data migration, staff training, and integrating CBS with existing systems during implementation.
Q4: How does CBS benefit customers?
A: CBS benefits customers by providing real-time access to account information, personalized services, and the convenience of online banking.
Q5: What are the future trends in Core Banking Solutions?
A: The future of CBS includes advancements in technologies like AI, blockchain, and cloud computing, which will further enhance its capabilities.
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