Today banking industry has achieved more scope on the technology front than ever before. Earlier banks were just business enabler; IT is now a business driver for the banking sector. With the help of IT banks have been able to implement Core Banking Solutions (CBS). CBS is an automation of banks across multiple delivery channels. Under CBS banks are able to achieve a centralized processing mechanism and in turn provide an ‘anytime anywhere’ service to their customers. However, core banking applications have a set of challenges as well.
With an increasing competition and changing market dynamics, banks have been forced upon to keep updated themselves for newer obstacles every now and then. Besides this fresh regulations and compliance requirements, industry consolidation, delivering cost effective products and services, maintaining secure data platforms, meeting ever increasing customer demands and other strategic issues, all these factors have made banking far more complex than it used to be in the past. Therefore to handle the increasing transaction volumes and do away with issues hanging around the current systems, banks require the right CBS in place.
Banking industry is getting globalize therefore banks need flexible, customer centric core banking environment which should be equipped with multi-currency and multi-lingual features. For instance, Canara Bank recently implemented CBS at as many as 1000 branches, which is one of the largest implementations in the banking industry and has included agricultural loans, loan processing, foreign exchange and service branch functionality. This step has helped the bank to move in line with the changing market scenario.
Currently, out of the total IT spending taken on by banks, about 75 per cent go toward maintenance of existing systems and certain that the business of the bank goes through smoothly. Therefore, a major amount of expenditure involved in upgrading core banking architecture is something many banks may not be able to afford at present. To gain a periphery over their competitors and attend to customer demands effectively, banks are required to take balanced steps by replacing old systems with new platforms, without giving up on existing core banking modules which may still cater to changing needs. Although considerable progress in CBS implementation by banks has taken place but there is much more ground left to be covered.