The central nervous system of a bank’s operations is its core banking system. This vital component oversees crucial daily tasks, including monitoring cash flows, administering customer accounts, and maintaining smooth operations. It’s the foundation that enables efficient banking services for customers.
Core banking refers to a backend infrastructure that unifies various branches of a single bank. This system facilitates real-time operations, such as managing loans, processing withdrawals and deposits, and handling payments.
What is the meaning of core banking?
“CORE” in “Core Banking” stands for Centralised Online Real-time Environment:
C - Centralised: Consolidates all banking operations into one unified system.
O - Online: Provides 24/7 network-based access to banking services globally.
R - Real-time: Guarantees immediate processing and updating of all transactions.
E - Environment: Integrates the entire ecosystem of banking technology and protocols.
This system interconnects bank branches through a single platform, enabling customers to access services from any location. It enhances convenience, accessibility, and operational efficiency while ensuring secure practices across many channels (e.g. mobile, web, USSD, branch, 3rd party, etc.) within the banking network.
A lot of modules and services make up a modern banking experience in core banking, and for this series, we will only explore how we built three major services at the heart of every core banking solution.
- Account Management Service
- Transactions Management Service
- Notifications Service
We will start with how the core banking system facilitates efficient customer onboarding and account opening. We’ll look at how it stores and manages all account-related information. This includes essential information like account numbers, balances, customer data and account details.
Next, we look at how the core banking system uses general ledger(s) to track all transactions across the network to create real-time, secure, and accurate transactional experiences (e.g. fund transfers, withdrawals, bill payments, deposits, etc.) for customers.
Finally, for this series, we’ll take a look at how the core banking system uses notifications to improve security and foster trust between the bank and its clients by keeping customers informed about their account activities and banking operations with real-time alerts, security notifications, status updates, multi-factor authentication, e.t.c
In each module, we look at the activities a customer can perform, the database design and architecture behind the scenes, and the considerations to make these activities safe and convenient.
Coming up next, meet the team.
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