These platforms are the foundation of banking operations but they also face many challenges. These platforms are often built on legacy systems that are outdated, causing a variety of obstacles, such as poor user experience, complexity, and technological obsolescence. These issues limit innovation and efficiency in the banking industry, forcing banks to re-evaluate their core systems. We explore here the main challenges that banks face with their core banking systems and possible solutions for future growth.
Lack of Customization Capabilities
Unable to adapt their core banking system to changing needs is a major problem that banks face. These systems are often constrained by old service contracts, and over time they undergo undocumented modifications. This makes it difficult and risky for them to be modified. The traditional banking systems are unable to meet the demands of today’s digital age, including rapid product launches and transaction processing. Inability to adapt leads to higher project costs, and longer timelines. Only 30% of core banking systems undergo a successful overhaul, which highlights the challenge.
Complicated and overwhelming
Another significant obstacle is the excessive complexity of core banking systems. These systems, which were developed more than 40 years ago, are plagued with security vulnerabilities and inefficiencies. The outdated nature of these systems limits their ability to improve customer service and integrate new technologies. With such outdated platforms, it is nearly impossible to compete with digitally-oriented banks and best core banking software platforms. These systems are often outdated and require a total overhaul. This is a time-consuming process, which can be costly and fail. Financial burdens can reach $100 million with no guarantee that the project will be completed or costs controlled.
Obsolete technology stacks
The use of outdated technology stacks can be a challenge when customizing mobile banking applications. Understanding user preferences and enabling features such as personalized alerts or templates is necessary to meet diverse user needs. Increasing customization options, however, can complicate the app development process, increase costs and delay launch. To deliver a user-friendly and feature-rich mobile experience, banks must balance these requirements.
Fiserv: Cost-Effective and Adaptive
Fiserv’s core banking platform is versatile and can be used to meet the needs of a wide range of financial institutions, such as customer onboarding, data tracking, transaction management and data management. The appeal of Fiserv lies in its seamless, high-performance integration with market products. Its cost-effectiveness and rapid response time are also key factors. Fiserv’s adaptability and openness to new ideas positions it for future growth. It delivers a consistent user experience across all channels that allows banks to tailor their services to the needs of consumers.
Oracle FLEXCUBE: Enhancing Efficiency
It improves efficiency for retail, corporate, Islamic Banking, Microfinance and Specialized Finance sectors. FLEXCUBE uses machine learning to provide insights that streamline processes and reduce costs. The platform allows banks to adapt to a rapidly changing digital banking environment, while facilitating secure collaborations with other service providers and maintaining control of their operations.
The conclusion of the article is:
Core banking platforms are essential to modern banking operations but they also face many challenges. Inadequate customization, excessive complexity and outdated technology stacks are some of the issues that hinder banks from being innovative and competitive. Platforms such as Oracle FLEXCUBE and Fiserv offer innovative solutions that provide adaptability, cost efficiency, and enhanced user experience. In order to maintain growth and success, banks will need to address these challenges as they navigate an evolving financial landscape. By investing in flexible, modern core banking systems, the banks can increase operational efficiency, improve customer satisfaction and remain competitive.
