A core banking system is the software used to support a bank’s most common transactions.
Basic Elements of core banking include:
• Making and servicing loans.
• Managing customer accounts and opening new accounts.
• Any branch transactions.
• Processing cash deposits and withdrawals.
• Processing payments and cheques.
• Calculating interest.
• Customer relationship management (CRM) activities.
• Establishing criteria for minimum balances, interest rates, number of withdrawals allowed and so on.
• Establishing interest rates and maintaining records for all the bank’s transactions.
Core banking functions differ depending on the specific type of bank. Retail banking, for example, is geared towards individual customers; wholesale banking is business conducted between banks; and securities trading involves the buying and selling of stocks, shares and so on. Core banking systems are often specialized for a particular type of banking. Products that are designed to deal with multiple types of core banking functions are sometimes referred to as universal banking systems.
