The banking industry is growing at an accelerated pace. What used to be a deposit and lending system in the past has transformed into a full-fledged platform that offers an array of services under one umbrella.
However, implementing a core banking system is a daunting task and many banks are still hesitating to take up this challenge. The huge cost of implementation, long time to complete, and change in culture are just some of the challenges that a bank needs to go through. So, is it worth taking this pain?
Let’s check out what is core banking and some of the key reasons why banks should use core banking solutions.
What is Core Banking?
According to Wikipedia, “Core banking is a banking service provided by a group of networked bank branches where customers may access their bank account and perform basic transactions from any of the member branch offices.”
CORE is the acronym for Centralized Online Real-time Exchange (or Environment). To put it in simple words, core banking is an integrated banking system that allows customers to perform various banking activities from anywhere in the world and enjoy superior banking services conveniently.
Why Banks Should Use Core Banking Services?
A couple of decades back, it used to take a full day for a transaction to reflect into an account as the data from the local branch servers were sent to the data center only at the day end. However, that is a thing of the past. With core banking transformation, now any banking activity can be performed within a couple of minutes. And the best part is, the customers don’t even need to visit the bank branches.
Here are some other important reasons why banks should go ahead with this transformation.
Improve Employee Efficiency
Core banking solutions can automate several banking processes while minimizing the workload of front end employees. As a lot of backend work is done through automation, employees can concentrate on more important tasks like marketing of new products and customer satisfaction. Another useful feature that helps to enhance employee efficiency significantly is the centralized communication system. It allows the employees of different branches to communicate in a faster and seamless manner.
Minimize the Cost of Operation
Core banking systems can consolidate multiple stand-alone applications while minimizing the cost of maintenance and operation. It allows the banks to move to a shared services platform and cut down on the expenses needed to maintain the legacy systems. With location independent banking, banks can handle a large volume of customers without spending a lot on infrastructure and support. Services like centralized backup and printing also help to reduce expenses as there is no need to keep separate systems in the branches.
Convenience to the Customers
Gone are the days when people had to visit the bank branches and stand in long queues to perform any kind of banking activity. With an introduction to core banking systems, now the customers can get a superior banking experience without having to visit the bank branches. Core banking services allow the banks to offer services through multiple channels like internet banking, mobile banking, ATMs and more. So, customers can enjoy anywhere banking and perform different banking activities from any part of the world.
Standardize Banking Processes
Standardizing the processes is another reason why banks should use core banking services. Core banking solutions simplify and streamline end-to-end business processes while making it more efficient and smarter. This helps to reduce the time to market new products. By standardizing business processes, banks can minimize manual operations while eliminating human error. This enables the banks to offer services at competitive prices and move towards smart revenue growth.
Improve Customer Retention Rate
Irritated customers are a part of every business. And banking is no exception either. Customers are less likely to buy additional products from their existing providers if they are not satisfied with them. Not only that, but they also tend to switch providers. To keep a customer happy and ensure that he/she continues with a business, it is crucial that their queries are responded to and solved at the earliest. Core banking systems allow the banks to offer better customer support and retain them for long.
Above are some critical reasons why banks should go ahead and get started with core banking transformation today.
The market dynamics are ever changing, and so are the customer needs. For a bank to remain competitive in the market, it is essential that they choose the right core banking solution and take the necessary steps to implement it successfully.
Happy customers are the pillars of any business. Core banking services allow the banks to offer location independent, 24/7 banking services while improving customer satisfaction level to a large extent.