The Coreless Revolution: Reshaping the Future of Finance – Part 1
Why managing AI risk presents new challenges
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The difficult of using AI to improve risk management
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How to bring AI into managing risk
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Pros and cons of using AI to manage risks
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Benefits and opportunities for risk managers applying AI
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Why Banks Want to Go Coreless
The banking industry is undergoing a significant transformation. The traditional core banking systems (CBS) that have been the backbone of banking operations for decades are being replaced by a new, more efficient, and innovative approach: coreless banking1.
What is Coreless Banking?
Coreless banking is a minimalist approach to CBS architecture. It strips away all but the most fundamental functions, leaving a core comprising just accounts, transactions, and product definitions1. Everything else, from payee information to regulatory reporting, sits outside this stripped-down set of functions, connecting to them via APIs1.
Why the Shift to Coreless Banking?
The shift to coreless banking has several key advantages:
- Innovation: With functions separated out and linked via APIs, innovation in each area such as cataloguing product and pricing is set free1. Banks can innovate faster use the best tools for each function1.
- Customer Experience: Without a conventional core, the coreless bank can accelerate innovation and transform the customer experience using hyper-personalization strategies1.
- Cost-Effective Solutions: Coreless banking opens the door to crafting tailor-made products and services, unlocking cost-effective solutions4. Using EPM from ArcOne, products can be launched quickly to maximize value opportunities.
- Regulatory Compliance: Coreless banking allows banks to maintain regulatory compliance and operational oversight3.
The Future of Banking
The bottom line is that coreless banking is about liberating financial institutions from their reliance on outdated legacy infrastructure and the big banking software vendors4. By adopting coreless banking, banks can navigate the complex financial landscape, staying ahead of the curve while delivering innovative and efficient financial solutions to their customers3.
The shift to coreless banking represents a profound shift in the banking industry. It’s not just about changing technology; it’s about changing the way banks operate and serve their customers. As we move into the future, coreless banking will undoubtedly play a crucial role in shaping the banking industry.
Sources:
1. Coreless Banking Is the Future: Here’s How to Get There
2. What financial institutions need to know about coreless banking
3. How Coreless Banking Can Give Banks a Competitive Edge in Today’s …
4. Modernizing core technology, without breaking the bank – McKinsey & Company
