How is emerging technology transforming the banking sector? – Part IV

We asked four titans of the banking industry for their thoughts on the most prominent trends driving the banking space and why they're so important

Banking has changed considerably in the last decade and our expectations of what a bank is, and where we should find it, are drastically different. It’s indisputable that technology has been the driving force behind this change. With that in mind, we asked four senior industry executives to give us their view on the technology that is most influencing banking.

Coreless architecture

By Abhishek Bhattacharya, Group Vice-President at Publicis Sapient

Modern, cloud-based core banking systems (CBS) are facilitating a move towards coreless architectures, which in turn will drive innovation and transform customer experience in the banking world.

In the 2022 Publicis Sapient Global Banking Benchmark Study, which surveyed 1,000 senior banking leaders, the top priority to achieve operational transformation (cited by 37%) was to transition to a modern, cloud-based CBS. Among leaders of the largest institutions (with assets of more than USD1tn), 48% of respondents made this their number one goal.

Modern, cloud-based CBS systems are widely regarded as the way forward with lots of banks prioritising how to transition to a coreless architecture as their top objective for 2023. This is because the old system of banks running legacy CBSs have run their course. These systems are difficult to change and it’s extremely hard to build new capabilities or innovate on these systems. Banking architectures are undergoing a profound transformation leading to an entirely different, "minimalist" approach to the CBS.

But what is coreless architecture? In short, in a "coreless" architecture, the key functions such as accounts, transactions and product definitions sit in the "core" but everything else sits outside of it, connecting to the core via APIs. This bears virtually no resemblance to legacy systems, which ran a huge range of arguably unwieldy functions.



By Alex Clere

February 08, 2023

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