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Digital Core-Banking: A Perspective
Core banking is redefined as “Centralised online real-time exchange” by Darmesh Mistry, a renowned international banking and technology consultant, author, and influencer. He describes core banking technology as “software that manages accounts—such as current accounts, deposits, or loans.” Ideally, the core banking system should be the ‘single source of truth’ for banks. However, traditional banks often operate multiple core systems across different product lines, leading to a fragmented source of truth.
The banking and financial industry is experiencing unprecedented innovation. Digitisation has introduced significant competition for traditional banks from various digital disruptors. These challengers leverage diverse technologies to address inefficiencies and offer simpler, cheaper, and superior services. They often collaborate with partners to develop and deliver services quickly, unencumbered by legacy systems and existing revenue streams that can hinder change.
Digital core banking is not just about eliminating paperwork. It must evolve to incorporate tokenisation, blockchains, cryptocurrencies, and genuinely digitised, cashless transactions. This transformation requires a comprehensive re-evaluation of the core banking products and the code supporting them, updating decades-old systems to modern enterprise architectures. It must also accommodate cross-border, multi-currency transactions, including both fiat and digital currencies, integrating new channels and modernised core systems.
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