Core Banking System
(CBS)
Description
Understanding Core Banking Systems: An Easy Guide
Ever wondered how a bank makes it possible for you to withdraw your money from any branch or ATM or even through your mobile phone? This is done through a Core Banking System, which is a technology backbone ensuring that banks render super fast and efficient customer service no matter where the customer is. So let’s understand what exactly a core banking system is, how it works and why is it so important for everyone who has an account in a bank.
A Core Banking System is defined to be the essential software from which banking operations are centrally managed.
Core means Centralized Online Real-time Exchange, and in a layman’s language, this signifies that everything pertaining to bank’s core business, right from account opening, processing deposits and withdrawals, extending loans to maintaining of customer information is done at one central location only. These were operations preformed by the core banking system before their advent. Client accounts were consolidated centrally as opposed to individual branch level. The client could deposit money in one branch and the bank draft was payable by the other branch. All this was creating customer dissatisfaction, inflexibility for the customers & banking made cumbersome stopping gaps in the system notified and re-work started. With the core banking system, all branches of the bank are linked with one central server. These servers work real time on customer account information, and financial transactions can be executed from anywhere.
So, whether you are in your hometown or a differentcity, with any branch’s help, the concerned data can be tapped immediately in your name, and thus work gets as smooth as possible. Deposits are made at one branch, and the money can be withdrawn from any other branch anywhere in the country or even through ATM. Account balance is checked via internet/ mobile banking.
It is real-time, always updated. Money can be transferred, bills paid, and even loans applied for from any branch or online.
Main Features of Core Banking System
All information regarding a customer is centrally held at one place where it can easily be accessed and updated. Processing in Real-Time: Every transaction properly updates the system; hence, your account balance is always correct. Multi-Channel Access: A combination of available channels, such as branches, ATMs, internet banking, mobile banking, etc., for access to the account. Automation: Most of the operational jobs are automated which reduces mistakes in things like calculation of interest and generating statements on time.
Daemon tools have become an integral part of the feature set of any core banking system, which provide smooth customer experience as well as the safety required to prevent different forms of fraud.
Why do you need a Core Banking System?
Anywhere Banking: You can do all the operations related to your bank account no matter where you are. This is much helpful for people on the move, travelers or working in different cities. Quick Service: As everything is centralized and automated, transactions can be done fast which don’t keep you waiting in a long line.
With core banking, what changed the way we have been banking for the past years:
Better Customer Experience: Although there are some aspects just like online banking, mobile apps, and around-the-clock support which a bank may have to offer. Efficiency for Banks: It’s possible that managing accounts through one system helps boost efficiency by saving time, cutting down on paperwork, and therefore, it helps serve more customers for a bank. Improved Security: Since control and monitoring activities are concentrated in one area, it helps in the better detection and prevention of fraudulent practices by the bank
How Did Banking Change with Core Banking?
Before the core banking system, customers were more attached to their home branch. If you relocated to another city, there is a possibility that you would be asked to open a new account. Everything would take days and updating took so much time. With the core banking systems, everything revolutionized: Any branch or ATM could access an account. Online and mobile banking became possible. New products and services could quickly be rolled out by a bank. Improved customer service since staff have immediate access to account details
Core Banking Services
- Opening and managing savings or current accounts
- Deposits and withdraws processing
- Loan issuance and management.
- Money transfers between the accounts.
- Account statements and history
- Debit/Credit Card management
Popular Core Banking Software
There are a few of the famous core banking platforms worldwide like Finacle, Flexcube, and T24. A bank selects its core banking software according to its requirements, size, and the kind of services it wants to render.
Conclusion
Because of core banking, modern banking has this one central heart that interconnects all branches and services so easy, fast, safe, and convenient for every transaction and service. Thanks to core banking, wherever you are in the country-and no matter where in the world your branch may be-you can access your money and account information. As technology advances, so will core banking systems; these developments will provide ever more outstanding service to both customers and banks.