Introducing Coreless Banking

Amid a period of unprecedented digital and technological transformation, fast-changing consumer, business and market demands, and regulatory challenges, banks face a dilemma. At the heart of any bank sit several core banking solutions that govern the bank's ability to launch new products and serve customers across an increasing range of channels.

These core banking systems were developed decades ago on the technology platforms that were available at the time (between the 1950s and 1980s). Today, a smartphone has more memory and processing power at a fraction of the cost of the original mainframe systems that banks spent millions of dollars buying.

Today, computers are cheaper, faster and more powerful, and they can run software that allows banks to scale better, be more agile for new products or distribution (channels) and innovate.

This simply isn't possible on their legacy technology.

Over time, as bank product lines grew, they introduced new channels, and regulators drove new requirements. Much of this was made possible by using newer technology. However, banks could not migrate or replace their core banking systems as they were central to everything the bank did, so new systems were developed. These newer systems depended on the data held by the cores, so they either took copies of data or directly integrated with them. This created further complexity in being able to change or replace core banking systems as doing so could require re-integrating tens and sometimes hundreds of other systems simultaneously.

These legacy cores could not support real-time banking and hence would have to be stopped overnight to balance ledgers, meaning that customers could not be served during those hours. Banks worked hard to ensure that the window the core could not serve customers was kept to less than 8 hours!