A Core Banking system is software used to support a bank’s most commmon transactions.Elements of core banking include:
- Making and servicing loans.
- Opening new accounts.
- Processing cash deposits and drawals.
- Processing payments and cheques.
- Calculating interest.
- Customer relationship management (CRM) activities.
- Managing customer accounts.
- Maintaining records for all the bank’s transactions.
Depending on the particular kind of bank, core banking operations vary. For instance, retail banking caters to individual clients, wholesale banking handles transactions between banks, and securities trading deals with the purchase and sale of stocks, shares, and other financial instruments. Core banking systems are frequently tailored to a certain kind of banking. Universal banking systems are occasionally used to describe products that are made to handle various essential banking functions.
HISTORY
Core banking became possible with the advent of computer and telecommunication technology that allowed information to be shared between bank branches quickly and efficiently. Before the 1970s it used to take at least a day for a transaction to reflect in the account because each branch had their local servers, and the data from the server in each branch was sent in a batch to the servers in the data center only at the end of the day (EoD). Over the following 30 years most banks moved to core banking applications to support their operations where CORE Banking may stand for “centralized online real-time exchange”. This basically meant that all the bank’s branches could access applications from centralized data centers. This meant that the deposits made were reflected immediately on the bank’s servers and the customer could withdraw the deposited money from any of the bank’s branches.
