Best core banking software companies in 2024
What are core banking systems (CBSs)?
Not a single operation in modern banking can be processed without core banking systems (CBSs). They serve as the engine driving every banking operation, granting customers access to their accounts and facilitating vital transactions.
At the heart of core banking lies the concept of the Centralized Online Real-time Environment (CORE), ensuring 24/7 access to real-time services. Through core banking, institutions empower customers with unparalleled convenience and accessibility, heralding a new era of digital banking.
Powered by advanced banking software and network technology, contemporary CBSs represent a paradigm shift in traditional banking practices. Operating as cutting-edge, cloud-based solutions, they offer a comprehensive suite of banking functionalities, including current accounts, savings, and lending. The core banking system, acting as a central hub, ensures the smooth and secure execution of banking operations, laying the foundation for a seamless customer experience.
CBSss benefits for private and business consumers
Customers benefit from the seamless integration of essential functions across diverse channels, spanning internet and mobile banking, payments, ATM withdrawals, loan issuance, interest calculations, and comprehensive relationship management activities.
For financial institutions, the core banking system plays a pivotal role in integrating seamlessly with the accounting system to consolidate account-related data. This includes vital information such as account numbers, balances, customer details, and loan payment schedules. Moreover, the core banking system acts as the central hub for the bank’s general ledger, utilizing double-entry accounting principles to oversee all transactions across the institution. This amalgamation simplifies the tracking and computation of daily metrics, encompassing deposits, withdrawals, fee transactions, outstanding loan amounts, and other financial operations. Ultimately, this streamlined process ensures the precise balancing of the general ledger.
Core banking software market volume worldwide
The banking industry is experiencing heightened competition, with next-generation banks leveraging core banking software to secure market share by targeting lucrative niches within the value chain. This trend is prompting traditional banks to reevaluate their legacy platforms.
Fortunately, there is a plethora of core banking software available to facilitate quick and efficient modernization for banks. According to industry reports, the global core banking software market was valued at USD 14.54 billion in 2023, with projections indicating growth to USD 62.75 billion by 2032, with a CAGR of 17.7% during the forecast period. This growth is driven by increasing investments in fintech technologies and CBSs, as well as the growing demand for centralized customer account management solutions.
Moreover, the COVID-19 pandemic has accelerated the adoption of remote work policies, impacting the financial industry worldwide and further emphasizing the need for accessible and efficient digital banking solutions, as well as the adoption of technologies such as cloud computing, Big Data, and AI.
As a result, more core banking providers are enhancing their products. These banking software solution companies offer various software delivery models, including subscription-based and white label on-premise products.
Core banking software outsourcing model
The best software relies on a composable architecture connected by APIs, allowing for the decoupling of distribution channels, products, and client data. This agile architecture enables rapid changes while ensuring a seamless digital customer experience.
Key functionalities like onboarding, payments processing, card issuing, and KYC services are seamlessly integrated into core banking software. While some providers offer integration with third-party vendors, it’s advisable to prioritize digital retail banking solutions that offer balanced, ready-for-integration products without limiting your options.
Creating core banking systems internally can be intricate and time-intensive, resulting in delays in releasing products. That’s why many banks outsource their core banking software to fintech providers. New cloud-based platforms with pre-integrated features allow for the assembly of best-in-class products at a faster pace and lower capital expenditure. Here are a few notable examples:
- BBVA, a prominent Spanish bank, has embraced the outsourcing model for its core banking operations. By leveraging external solutions, BBVA can prioritize innovation and customer experience while entrusting specialized providers with the underlying technology.
- Standard Chartered, an international banking giant headquartered in London, has opted to outsource its core banking software. This strategic decision enables Standard Chartered to streamline operations, enhance agility, and swiftly adapt to market changes.
- Revolut, a leading digital bank, has integrated core banking solutions from fintech providers to enhance its services and rapidly expand its customer base.
- ING, a renowned Dutch multinational bank, has also made the choice to outsource its core banking functions. Partnering with fintech companies allows ING to efficiently manage its digital transformation and offer cutting-edge services to customers.
- Commerzbank, a leading bank based in Germany, has incorporated outsourcing into its corporate digitalization strategy. This strategic approach helps Commerzbank stay competitive and deliver seamless banking experiences to its clientele.
- N26, a German digital bank, has also opted to outsource its core banking software. This decision allows them to concentrate on their commercial and business development strategy while delivering a seamless user experience and minimizing any development bottlenecks.
- Tandem, a UK based bank, has embraced outsourcing for its core banking requirements. This approach enables them to maintain agility and responsiveness to market demands.
- O2 Banking, a mobile banking service, has made the decision to outsource its core banking software. By collaborating with fintech partners, they can efficiently manage their operations and offer innovative features to their user base.
These banks, along with numerous others, recognize the advantages of outsourcing, including accelerated time-to-market, cost-effectiveness, and access to advanced technology. The trend of outsourcing core banking functions continues to shape the banking industry, enabling institutions to adapt swiftly to evolving customer expectations and market dynamics.
Key features and applications of CBSs
CBSs have become the backbone of modern financial institutions, offering a myriad of features and applications that cater to the diverse needs of today’s banking landscape. These systems, characterized by their real-time processing capabilities and extensive API integrations, empower financial institutions to deliver seamless and innovative banking experiences to their customers. Let’s delve into some key applications of core banking systems and how they are transforming the financial services industry.
- Neobanks can leverage white label banking products to launch new solutions in a cost-effective manner, utilizing existing EMI/bank licenses.
- With direct card issuers like Mastercard and Visa, businesses can effortlessly issue white label cards.
- Providers can access unique IBAN issuance capabilities for seamless settlements, utilizing APIs for payment processing through SEPA/SWIFT/ACH/CHAPS in multiple currencies.
- EMIs and PIs, including AISPs and PISPs, can utilize e-wallet solutions reminiscent of Paypal and Alipay.
- Businesses can facilitate money remittance services, supporting users with seamless international transfers akin to Wise.
- Finally, core banking systems enable the integration of cloud payment acceptance platforms for MSPs and PSPs, diversifying revenue streams with comprehensive online and offline payment acceptance services for merchants.
From enabling the launch of cutting-edge financial products to facilitating seamless payment processing and diversifying revenue streams, CBSs empower financial institutions to meet the evolving customer demands and stay competitive in an ever-changing market landscape. As technology continues to advance, the applications of core banking systems are poised to expand further, reshaping the future of banking and financial services.
Best core banking software companies in 2024
Satchel. Established in 2018, Satchel.eu is one of the fastest-growing European EMI companies based in Lithuania. Its core banking platform presents an ideal solution for financial institutions seeking to expand into the EU and UK markets. With a direct connection to CENTROlink, the payment system operated by the Bank of Lithuania, Satchel enables effective and cost-efficient financial operations, contributing to Lithuania’s status as a leading country in the EU fintech landscape. Satchel facilitates smooth integration of embedded finance through various APIs and incorporates advanced AI tools and pre-integrated third-party solutions to offer services such as IBAN issuance, e-wallets, and payment processing. As a direct partner of Mastercard Europe, it provides white label card issuing for payment institutions and startups, empowering them with seamless payment solutions.
Backbase, chosen by more than 80 banks globally as their preferred core banking software provider, empowers financial institutions to prioritize digital transformation. With its Omni-Channel Banking Platform, Backbase serves as the technology partner of choice for leading banking firms like Barclays, Credit Suisse, Deutsche Bank, Fidelity, and ING, among others. Since its establishment in 2003, Backbase has been instrumental in helping banks enhance their digital presence. Presently, the company influences the daily experiences of over 90 million end customers. Renowned for its focus on customer experience management and rapid implementation capabilities, Backbase stands out as a top-tier digital banking solution provider.
Bricknode is a versatile cloud banking platform designed for financial businesses. With Bricknode Core as its foundation, users can access ready modules for trading, funding, lending, and deposits, or develop their own apps and integrate them via the platform’s API. Originally from Sweden, Bricknode now serves clients worldwide, supporting digitalization for financial services businesses of all scales. In addition to its financial infrastructure, Bricknodealso offers custom development solutions to meet unique customer needs.
Finastra, a real-time core banking processing engine, partners with 90 of the world’s top 100 banks by asset size. Operating across 130 countries, Finastra offers a diverse range of financial software solutions, making it stand out among banking system vendors. Through its flexible technology, Finastra empowers clients to transition from legacy banking to modern, transparent, and agile online banking solutions. Leveraging its modular technology stack, financial institutions can swiftly launch new functionality with reduced risk and minimized development efforts.
FIS. Headquartered in Jacksonville, Florida, FIS is a leading American company offering a diverse range of financial products and services. With approximately 62,000 employees worldwide, FIS traces its roots back to 1968 when it was founded as Systematics. Today, FIS provides core banking solutions across three primary segments: merchant solutions, banking solutions, and capital market solutions. Its comprehensive product lineup encompasses banking hardware, core banking, card issuing and processing, digital payments, risk management, compliance solutions, commercial lending, fraud detection, and various other related services.
Forbis is an IT company specializing in solutions for the finance industry, with a focus on digitalizing banking processes. Alongside product development, they offer consulting and training services for core banking development. Their flagship product, FORPOST, is a cloud-based core banking SaaS solution that enables account management, payment processing, deposits, and currency exchange. While they emphasize their expertise in the CEE and CIS markets, the applicability of their products in other regions may vary. Explore their article on cloud banking for more insights, and learn about starting a payment processing company in another informative piece.
Mambu has quickly gained traction since its inception in 2011. In just two years, Mambu’s platform was embraced by 100 microfinance organizations across 26 countries worldwide. Today, Mambu is headquartered in Berlin and serves over 150 banks, fintech firms, and telecom companies, catering to more than 14 million end-users. With Santander, N26, and Orange among its clients, Mambu is renowned for helping top financial software companies swiftly develop, launch, and expand their digital-first banking and lending services.
nCino. Founded in 2012 in North Carolina, USA, nCino emerged to address inefficiencies in commercial loan systems. In under a decade, it transformed into a leading provider of the nCino Bank Operating System, built on the Salesforce platform. This comprehensive system streamlines operations, improves customer experience, boosts employee efficiency, and helps optimize costs. nCino offers a suite of cloud solutions for various banking sectors, including SME and commercial banking, retail banking, mortgage, cash management, and customer engagement. Today, its platform empowers numerous financial institutions worldwide, contributing to their continuous growth.
Novatti is a prominent player in the fintech sector, specializing in facilitating payments for businesses worldwide. With a global presence spanning 58 countries, Novatti offers comprehensive solutions for transaction processing, payment acceptance, card issuing, and subscription payments, contributing to the transition towards a cashless society. With two decades of expertise, Novatti delivers robust technology solutions for various sectors, including branchless banking, donations management, and digital wallets. As a Visa Principal Partner and Issuer, Novatti enables fintech businesses to issue both physical and virtual Visa cards, empowering them to offer branded prepaid cards to their customers. Explore Novatti’s offerings in our article on Top 10 Card Issuing Platforms to find the ideal solution for your payment business.
Oracle FLEXCUBE powers accounts for 10% of the global banked population, with over 600 retail banking software solutions operating in 140+ countries worldwide. This comprehensive and modular banking software addresses core banking needs and accelerates time-to-market for new products. FLEXCUBE’s end-to-end digital capabilities enable financial institutions to innovate and deliver cutting-edge digital customer experiences. Equipped with advanced automation tools leveraging Machine Learning, clients can gain deeper insights and improve straight-through processing. Oracle is the ideal solution to propel financial service companies into the realm of retail banking software and solutions.
Securepaymentz provides a core banking solution tailored for the financial services sector, specializing in virtual banking platforms. Their feature-rich platform covers a wide range of financial operations, account management, and currency exchange functionalities.Offering a subscription-based model, Securepaymentz ensures regular updates and easy access to additional features for their clients. However, while the subscription model may seem more affordable initially, ongoing maintenance costs by Securepaymentz’s team could accumulate over time.
Temenos. Founded in 1993, Temenos is a leading provider of core banking software systems. With over 25 years of experience, Temenos offers a wide range of system integrations and cutting-edge technology. Trusted by over 3,000 clients, including 41 of the world’s top 50 banks, Temenos serves more than 500 million customers daily. Their T24 banking software is designed to help retail, corporate, and private banks manage transactions, risk, enterprise credit, and more, positioning them among the top 10 banking software companies.
Finacle, developed by Infosys, stands out as a premier cloud-based core banking solution, spearheading the modernization of banking services in the digital realm. Trusted by banks spanning 100+ countries, Finacle caters to over 1 billion end customers worldwide, making significant strides in banking technology. Through its open APIs, integrated customer insights, and dynamic real-time processing engine, Finacle offers a comprehensive suite of features tailored to propel innovation-led growth. This adaptable solution streamlines the introduction of new products and bolsters digital adoption efforts. With a track record of serving over 1,300 clients, Finacle continues to deliver swift, secure, and personalized core banking services, cementing its reputation as a distinguished provider of core banking solutions.
In conclusion
The versatility offered by CBSs extends beyond just their features and applications; it encompasses a range of delivery models tailored to meet the diverse needs of payment companies in today’s rapidly evolving financial landscape. Whether opting for subscription-based services or deploying white label solutions, financial enterprises have the flexibility to align their choice of core banking software with their strategic objectives and market positioning.
Selecting the right core banking platform is paramount, as it can profoundly impact the efficiency and competitiveness of a financial institution. Satchel’s solution stands out as a prime example, offering a comprehensive suite of tools and services that not only meet the current demands of the industry but also anticipate future trends. By leveraging Satchel’s platform, financial enterprises can accelerate the development process of banking products, streamline operations, and gain a competitive edge in an increasingly crowded marketplace.
In essence, the decision to adopt a core banking system goes beyond mere functionality; it represents a strategic investment in the future success of a financial institution. With the right platform in place, organizations can navigate the complexities of modern banking with confidence, driving innovation, and delivering value to both customers and stakeholders alike.
