For all the talks around innovation, far too many banks are still struggling with Core Banking System Failures.

As usual, every bank must be primarily concerned about offering efficient and consistent banking services across various channels. Talk of deposits, withdrawals, payments, loans, and credit, and many more. These services are provided by banks through a variety of channels, including branches, online and mobile banking, and automated teller machines.

Basically, a core banking system (CBS) is the heart of the bank, handling everyday financial transactions and maintaining accounts and other financial information for the bank.

Given the enormous amount of transactions banks receive and the significance of the industry to the rest of society, the core banking system can be vulnerable to service problems. But it only takes one error for an old/legacy system as a whole to be negatively impacted. The bigger the potential failure, the higher the chance of being phased out by a more agile newcomer.

So, what happens when the core banking system is slow, or completely fails?

As usual, banks would rush to deploy a new core banking system, or try to upgrade an existing one. This is a large and long-term investment for the bank as it leads to a challenging transformation process that frequently lasts for years and has a very high failure rate.

And, of cause, overhauls/upgrades of the existing core banking system are costly and undoubtedly risky. And any bank stands to lose more by attempting one. Core software systems banks feed operations into are extensive and complex, making upgrades scandalously hard and costly.

A legacy core banking system is even more vulnerable to attack when the basic architecture is altered since it was not created from the bottom up to perform the new function, which would obviously affect the functionalities now provided by the system.

How to mitigate Core Banking System Failure

So, how can banks safeguard against core banking malfunctions? Deploying a solution that makes banking operations, and specifically, financial processing, fast and easy.

— because customers must continue accessing services despite the failure of the core banking system.

It's not simple for banks to do this on their own.

Based on experience, amongst the solutions to these challenges is finding a system that can act as a bridge between the CBS and banks' customers or clients.

Such a solution should typically mirror the relevant customers' data from the CBS to its own database in a condensed and lightweight manner, making the information accessible for processing and display on various channels such as internet banking, mobile banking apps, ATMs, and other digital and physical channels.

That means the solution ensures the information presented to the customers through the different channels is consistent and up-to-date.

Ideally, the exchange of data must be near real-time, allowing customers to perform transactions, view account balances, transaction history, and other banking operations in a seamless manner across multiple channels.

Overall, banks need to be ready to relieve their outdated infrastructure with a more contemporary one that is built to handle the risks and difficulties posed by lack of resilience and slow performance of a core banking system.

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NLS TECH Solutions.

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Tel: +254-20-263 2768.

Email: [email protected].