Explore Next-Generation Core Banking Vendors to Unlock New Capabilities and Outpace Competition
Understand the value of next-generation cores beyond the traditional players.
- Your bank is facing growing competition from new entrants and existing players who are launching new products and services while also making their products faster and easier to use.
- The business wants to launch new products and services, but your existing core banking system struggles to support new capabilities.
- New vendors and offerings have come to market; they are quite different than your existing core, and you are struggling to keep up with the current state of the market and vendors.
Our Advice
Critical Insight
- Your team doesn’t have the time to scan the market because there are so many core banking systems and vendors.
- Core banking vendors are going in different directions from a product feature and capability perspective, and it is difficult to compare them side by side.
- There can be an overwhelming number of options, and you need to make sure that the features and functionality that your bank needs are met by the vendor you choose.
Impact and Result
- Aggregate the vendors into one landscape including a cross section of vendors to assure you are evaluating from a broad-based group of offerings.
- Define your bank’s key capabilities through cost and competitive advantages and map back the vendors’ capabilities to the retail banking reference architecture.
- Review the vendor functional criteria Info-Tech analyzed for ten key players in the core banking system market and summarized them.
Upcoming
Webinar
Tuesday, February 04, 2025
04:00 PM EST
Explore the Benefits of Next Generation Core Banking Vendors
Register NowExplore Next-Generation Core Banking Vendors to Unlock New Capabilities and Outpace Competition
Understand the value of next-generation cores, beyond the traditional players.
Analyst Perspective
A new core may transform your bank.
The traditional core banking system (CBS) vendors have been around for decades. Their approach to innovation is heavily focused on the acquisition of smaller and more innovative players, which they integrate into their broad existing platforms. This process is time consuming and results in traditional vendors lagging in the market. It can also result in unnecessary complexity in their technology.
As competition continues to escalate in the banking industry, many banks are reconsidering their core banking systems and are choosing wholesale replacement over evolution of their existing systems.
Most of the new competitors are using core banking systems with modern architecture and features that will become the foundation of their competitiveness in the retail banking market. Your bank needs to keep pace. To do this, and to remain competitive, your bank must have a modern core banking platform.
David Tomljenovic
Head of Financial Service Industry Research
Info-Tech Research Group
Executive Summary
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Your Challenge |
Common Obstacles |
Info-Tech’s Approach |
|---|---|---|
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Your bank is facing growing competition from new entrants as well as existing players. Both are launching new products and services while also making their products faster and easier to use. The business wants to launch new products and services, but your existing core banking system struggles to support new capabilities. New vendors and offerings have come to market, but they are quite different from your existing core. You are struggling to keep up with the current state of the market and vendors. |
Your team does not have the time to scan the market because there are so many core banking systems and vendors. Core banking vendors are going in different directions with both product features and capabilities. It is difficult to compare them side by side. There can be an overwhelming number of options. You need to make sure that the features and functionality your bank needs are meet by the vendor you choose. |
Aggregate the vendors into one landscape. Include a cross section of vendors to ensure that you are evaluating them from a broad-based group of offerings. Define your bank’s key capabilities through cost Review the vendor functional criteria in the second section of this blueprint. Info-Tech has analyzed and summarized top-level features of core banking systems for ten key players in the CBS market. |
Info-Tech Insight
Next-generation cores are considerably different in architecture than older legacy cores. They support new approaches, such as composable infrastructure and micro service-based architectures, which are inherently open and encourage the development of external ecosystems. They are designed to deliver the products and services needed in today’s competitive banking market.
Banking products and services are evolving as technology evolves
Info-Tech Insight
Your core banking system will facilitate all functions, starting with product design and development, policy quotes and issuance, and claims management through to payment processing, fraud and risk management, customer relationship management (CRM), and data and regulatory reporting.
Sources: 1. “The Intelligent Enterprise Whitepaper,” SAP, 2022; 2. ”Future of Core Banking Systems,” MP2 Fintech, 2022
Your core banking system is the foundation of your bank’s operations
Banks are moving toward composable core banking systems. Older cores provided most of the capabilities that a bank needed to operate using an integrated approach. Modern cores are composable and allow banks to assemble a collection of best-of-breed services that connect in a composable manner.
Microservice-based architecture supports agility. Monolithic code bases are being replaced by smaller microservices.
Ecosystems support your core. Legacy cores were designed to deliver all the capabilities themselves. Modern cores recognize external innovation and provide access to external capabilities that work with them.
Application programming interfaces (APIs) orchestrate all elements of your core. Rigid point-to-point integrations are being replaced by APIs that allow a bank to be agile and responsive to changing markets and technologies.
Info-Tech Insight
Core banking systems are the focus of major architectural shifts. Closed and highly integrated cores are being replaced by service-oriented architectures that are designed to be open and flexible.
Source: Numeral, 2024
Upcoming
Webinar
Tuesday, February 04, 2025
04:00 PM EST
Explore the Benefits of Next Generation Core Banking Vendors
Register Now
David
Tomljenovic
Research Director
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