Core banking architecture

In 2009, Paul Volcker described the banks' ability to change as follows: "The last real innovation by banks was the ATM". And even today, banks still often find it difficult to actively drive innovation and make their business models more efficient. However, the challenges facing financial institutions these days require decisive and targeted action.

The foundation for the successful implementation of the digitalisation strategies defined in almost all banks is a core banking architecture that focuses on data and processes. Existing processes must be designed more efficiently and new solutions developed to meet changing customer needs.

The following areas of action in the core banking architectures should be considered in detail:

• Digitisation and structuring of data
  Thanks to the use of modern machine learning algorithms, there are now established systems on the market that can be used to digitise analogue data that is still widespread. The challenge lies in the targeted integration into processes and overall architecture.
• Provision of data and analysis and evaluation functions
  A centralised operational data repository can provide relevant data and store it in a traceable manner. This enables banks to inform customers automatically and proactively. It is important here that there are no competing data repositories within the IT architecture!
• Workflow support and automation of business and system processes
  Comprehensive workflow management solutions in conjunction with operational data budgets are a basic prerequisite for being able to utilise efficiency potential.
• Modularisation and expansion of value chains
  Banks are now increasingly integrating fintech innovations, building their own innovation labs and "digital factories" to accelerate innovation processes and pursuing open banking strategies. With increased openness, modularity and flexibility of the IT architecture, it must continue to be ensured that the requirements for the security and stability of the solutions meet the bank's requirements in the core banking area.
• Comprehensive omnichannel support
  Customers' requirements in terms of user experience when using services have increased significantly, particularly due to the use of digital platforms. In the target picture, architectures must be so flexible that regulatory or new market requirements can be implemented quickly and across all channels.
• Switch to 24/7 operation with real-time processing
  While electronic customer channels are now available around the clock at almost all banks, the differences start with the data supply for these channels - from sales displays that are only updated daily to the display of all account transactions in real time, a wide range of different characteristics can be observed on the market. Real-time is the goal: banks should therefore now define the right approach for them to fulfil real-time requirements.