Considerations for a coreless banking future

FOR decades, banks have run core banking systems (CBS) that control a huge range of essential functions from payee information to regulatory reporting. However, the Covid pandemic and the shifting tide of consumer demands driving digital adoption has exposed a crucial flaw with this model, which is that legacy technology is severely hampering the speed at which established banking institutions are able to bring new services online.

Banking technology must undergo a sea change to transform banking for the future; this lies in an entirely different and more minimalist approach to traditional CBS architecture – what’s known as “coreless banking”.

A modern CBS bears virtually no resemblance to existing legacy systems. Where previous generations of CBS ran a huge range of functions, modern systems have stripped away all but the most fundamental, leaving a core comprising just accounts, transactions, and product definitions. In today’s coreless banking architecture, everything else sits outside this stripped-down set of functions, connecting to them via APIs (application programming interfaces).