As neo-banks win market share and serve customers at around one-third of the cost of traditional. Then, there are threats posed by big tech players eyeing lucrative niches in the value chain. Post-pandemic customer is more digital, and less loyal. Also, today’s banking regulations are equally about innovation (PSD2 for instance) as they are about reporting and compliance.
That being the landscape for core banking software, what are the incumbent banks to do?
The answer, more than ever, is to exploit disruptive technologies like cloud, mobile, big data, microservices, open API’s and AI. But these technologies rely on a robust banking core.
Before we look at the top 10, let’s see the top 4 parameters that distinguish the great core banking software from the good.
- IT cost reduced: Removing technical debt, pushing for higher efficiencies by leveraging cloud-based services, not to mention higher developer productivity (via automation tools DevSecOps) – are all factors that add to reduce costs.
- Quicker time to market: Employing both hyper parametrized configuration and higher standardization levels, banks leverage automated testing – all of which helps them to speedily develop new products and services.
- Customer-centric proposition: Data differentiates. Modern-day core banking software support integrated data sets and operate on a single source of truth. This capability in turn helps create real-time personalized experiences and brings into play, advanced analytics. Ergo. Precise decision making and a happier customer.
- Mastering scale through ecosystem partnerships: Modular architecture and API communication enables rapid scaling. This becomes critical especially in a development environment where core and ancillary services are relatively cheaper.
Little wonder that a McKinsey report, highlights 65% of banks surveyed exploring next-gen core banking platforms.
How were the top 5 arrived at? Simply, by applying these five comparisons.
- Faster access to support digitization
- Flexibility in pricing
- Facilitating faster time to market
- Supporting agile and remote working
- Allows new capabilities like open banking
Top 5 Core Banking Software in 2022
- Temenos Transact: 25 years of industry-defining banking software, Temenos supports retail, corporate, wealth, and treasury lines of business. 41 of the top 50 banks use Temenos Transact. It has been ranked #1 for 16 years by IBS intelligence. Cloud-native, Cloud-agnostic, API-first, and AI-enabled, Transact (it was called T24), allows banks to launch products in cycles that are 10X faster.
- Mambu: Riding on a composable approach (traditional providers lock functions like decisioning, reporting, analytics into dedicated applications), Mambu offers low-code, born-in-the-cloud functionalities that lets banks scale on their terms. With deployment across 65 countries, 200 + global customers, and a 4X higher NPS score than others, Mambu’s USP is to deliver great modern financial experiences.
- SDK Finance: With 15 years in FinTech, SDK’s use-cases target neo banks, E-wallets, currency exchanges, and online payments. The core banking software allows creation of digital banking solutions so financial institution can deliver reliable products and services. Secure authentication, next-gen integration offers ease in handling traffic; SDK finance’ includes best-in-class personalization.
- Oracle Flexcube: Packed with features that modernizes a bank’s core system for today’s digital and agile demands, Oracle Flexcube places significant value on enhanced customer engagement, increased insight generation, and rapid integration approaches via open architecture. The USP of Oracle’s product is the flexibility banks get in choosing transformation models, and the associated support across deployment models.
- Infosys Finacle: Finacle helps both traditional and emerging financial organizations in their digital transformations, focussed on frictionless customer experiences. Relying on Finacle, banks across 100 countries service 1B customers and $1.3 B accounts. Bringing a proposition of – ‘truly digital’ – Finacle’s core banking software offers flexible product factories, extensive parametrization, product building and reusable business components – all of which accelerates innovation-led growth.
In 2022, what is the consensus on core banking software – final words
Most incumbent banks are limited with legacy platforms. Approaching inflection points puts distance between the leaders and laggards, each passing day. The post-pandemic altered customer behavior and accelerated digitalization trends, makes it necessary to act without delay. Once an assessment of the current core banking platform is done, banks should choose solutions and software that greatly increase their odds of success.