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What Are Core Banking Solutions?

The Core Banking Solution (CBS) is the network of branches of banks that allows users to handle their bank accounts and utilize various banking facilities anywhere in the globe.

Simple as that, there’s no requirement to go to your local branch to conduct bank transactions. You can access it from any place, anytime. You can access banking services at all branches of the institution that is part of the CBS network, regardless of which branch where you established your account with.

If a bank adopts CBS the customer will become the bank’s client instead of the customer of a specific branch.

Execution of the Core banking system across all branches allows you to accelerate the majority of regular transactions for banks as well as customer. With Core Banking, every branch connect to banking applications through a central server, which is hosted in a secure datacenter.

The application or software for banking performs the basic functions such as managing transactions and balances of cash withdrawal and payment as well as interest calculations on loans and deposits, etc. This application for banking is hosted on a central server, and is accessible via an internet connection from any device.

What is the reason we require Core Banking Technology ?

Nowadays, the application in Information Technology (IT) is vital to the success and growth of any company and this is the case for the banking sector as well. With the use of IT in all fields banks can reduce the operating costs; they also can provide products and services for customers at affordable prices.

CBS is a must

To keep up with the constantly changing demands of the market and customers.
In order to simplify and improve the bank’s processes so that employees can concentrate on marketing and sales.
Customer convenience and banks.
To speed up the bank transactions.
To increase presence in remote and rural regions.

The basic components of CBS that aid customers are

Internet Banking
Mobile Banking
POS and kiosk systems
Fund Transfers – NEFT, RTGS

Benefits of Core Banking

Core banking solutions can be beneficial for banks as well as their customers.

A) Benefits for Customers

Faster service at counters of banks for routine transactions such as cash deposits, withdrawals and passbooks, statement of accounts demand drafts, etc.
Banking anywhere, eliminating branch banking.
Banking services are available All hours of the day, every day.
Rapid payment processing via Internet banking and mobile banking.
Anywhere, anytime banking with ATMs.
Every branch is connected to central servers or datacenters, therefore the deposits made at any branch are immediately reflected and customers are able to take money from any branch anywhere in the world.
CBS can be extremely beneficial to those living in rural areas. Farmers can get e-payments to pay for subsidies, and other benefits. on their bank accounts directly. Transfer of funds from cities to villages and vice versa can be made easily.

B] Benefits for Banks

Standardization of processes within banks and branches.
Customer retention through improved customer service.
Accuracy in transactions and minimization of mistakes.
Better management of documentation and records by having central databases enables quick collection of reports and data.
It is easier to submit different reports to Government & Regulatory boards like RBI.
The ease of opening accounts as well as processing cash and servicing loans and calculating interest rates, as well as implementing policy changes such as altering interest rates, for example.

The majority of commercial banks in the private sector have adopted the Core banking solution, however many cooperative bank, Regional Rural Banks are not benefitting from CBS.

With the aid of core banking and most advanced technology Private sector lenders are providing an edge to urban co-operative banks(UCBs) as well as other government-owned banks.