Core Banking Solutions (CBS) is networking of bank branches. This networking allows customers to access banking facilities from any bank branch. In the last decade core banking solutions has changed the way people carry out their banking transactions. A good Core Banking Solution standardizes business processes across branches, streamlining data management and provides analytics like risk and profitability analysis.
From the customer’s viewpoint, Core Banking Solution saves time, is convenient and avoids the frustration of standing in queues for getting their banking work done. CBS benefits banks also. Let’s look at the top 5 benefits of Core Banking Solutions for banks:
Customer loyalty: Core Banking Solution allows banks to give excellent customer service. Not only can customers access their bank accounts from a different branch. With banking transactions becoming easier, banks are able to retain existing customers, enroll new customers and increase customers’ relationships. Core Banking Solutions allow banks to introduce innovative customer centric products compared to traditional and often sluggish banking processes.
Increased employee efficiency: Core Banking Solutions allows banks to automate certain tasks thus reducing manual workload. With automation, the accuracy also increases. Core banking Solutions has enabled bank employees to make information exchanges across branches seamless and faster. It helps banks utilize their workforce efficiently. Efficient work means more business opportunities.
Decrease in operational cost: Due to Core Banking Solutions, footfalls in banks have reduced. Customers find it convenient to access their accounts and carry out banking transactions over the internet or ATMs. This helps in reducing the infrastructure cost at the bank’s branches. As the need for manual processing is reduced, banks can focus on improving operational effectiveness like lowering the time to market for new products and faster clearing and settlement process.
Less IT maintenance: Core Banking Solutions allow banks to centralize their databases and optimize cost as compared to legacy practice of standalone systems at individual branches. As the banks move to shared services platform, IT expenses are reduced. Features such as printing and backup are centralized which eliminates maintenance of the printing and backup machines at individual branch. As Core Banking Solutions are highly secure there are fewer chances of information security lapses which reduce the risk of penalties.
Access to analytics: Analytics applications are integrated in most of the modern Core Banking Solutions. Information collected in the back-end can be accessed anytime and converted to actionable insights. Also banks can rectify issues in real time. CBS has created smarter and transparent banking processes.
Companies which develop core banking products as well as banks have understood the constantly changing banking ecosystem and this had lead to improvements in designs of recently launched solutions. All banks are competing against each other to provide best banking experience to their customers. By adopting Core Banking Solutions, banks are able to automate manual processes, improve employee efficiency and reduce costs by standardizing processes and providing online banking services. Banks have also realized tangible benefits like increased market share and reduced cost of deposits.