Coreless banking: Accelerating time to market for key customer journeys
As customers increasingly look to their devices to assist in their daily lives, financial services businesses need to deliver simple, relevant, and easily accessible products and services when and where customers need them. Responsive digital offerings are at the core of this vision, creating a flexible operational model that allows financial services to fulfill new customer expectations while overcoming the typical challenges associated with integrating cross-functional business processes and the critical systems that support them.1 Implementing a hybrid cloud architecture is essential to achieving this business fluidity—requiring a technological foundation that allows both legacy and new applications and services to be modular business components that can be combined, orchestrated, and recombined in a way that is adaptable to the ever-changing markets in which banks operate. This distributed architecture is described as coreless banking.
Coreless banking is the delivery of banking services that are not dependent on traditional core systems. It is a new way to build a digital customer journey from pre-defined, modular business services. Unlike monolithic applications and services—where all software systems are tightly integrated—in coreless banking, there is no dependence on isolated core banking engines. Every banking service is defined as an individual, modular business function, defined and maintained independently from all other functions so that banks and fintech partners can continue to innovate and then combine updates.
Architect your business to be flexible and resilient
The goal of many current modernization efforts is to break down monolithic architectures by isolating core system processing from the bank servicing functions. Often, applications and services have been integrated into these core banking engines over decades. Refactoring monolithic codebases into smaller, more modular business functions (also known as microservices) results in cloud-native applications and services that are independently scalable. And they can be developed, shared, and maintained across teams―alleviating the hindrance of technical debt that monolithic core systems often have on digital business and innovation in banking.
An IT platform provides the ability to connect and coordinate these modules across the business, orchestrating the combinations and recombinations of business functions (defined in modules) to address different customer journeys. When standardized across all business functions, an IT platform can also reduce risk because of its inherent security and policies that can be consistently applied throughout or even be specifically adapted to each developer role.
The business of banking is expected to continue to change with technology advances, regulations that are yet to come, changing customer lifestyles, and more. Banks will need to be able to quickly adapt their products and services to remain relevant. Increasingly, the legacy architectures that have defined banking experiences for decades are inhibiting the industry’s ability to address the expectations of the digital future. Assembling ready-made modular capabilities allows banks to reduce time-to-market, accelerating the development and delivery of responsive digital products and services via new channels and integrated fintech offerings.