The Core Banking Delusion

Core Banking is a dirty word nowadays.

Some banks even try to pretend that it does not exist.

Why is this so ?

Almost all core banking systems where developed around 40 years ago.

At that time these systems were modern.

Some even had a rudimentary (Codasyl) database although most were using indexed files.

Real time update of the "database" was a no no, these systems used "memo posting", the "database" was only updated at night in batch mode. Real time update could not be trusted.

There was no notion of logical transactions using Commit or Rollback, that all had to be coded.

Core banking vendors usually made good money because their customers, banks, always had plenty of it.

They just kept selling their "golden goose", there was no need for modernization.

The vendors scared the living daylight out of the banks in case they were looking at something else, new software could not be trusted. Some vendors even said that Unix systems could not be trusted, only mainframes were reliable.

The vendors spend a very large part of their budget on marketing, some employ PhD's only.

But you know, it was old technology and time does not stand still. People retire and young people are not interested in learning old technology.

The solution was interfaces, building Java stuff around Core Banking without having to change it. That was the idea.

Nowadays 200 interfaces and 10,000 person days is normal for a core banking implementation.

The interfaces make for tremendous complexity. Everything is done through API's.

Some core systems have hundreds of inflexible API's which makes for very inefficient processing.

40 years ago everything was "in core" apart from modernities like 24/7 ATM systems, they were interfaced because core had to go down at night to do the massive batch work.

Now Core is set in concrete, it cannot be changed.

Core banking is not rocket science, far from it. Core systems mainly do massive I-O and very little compute.

The banks have no way forward, they can only go from one dinosaur to another, a pointless exercise, they gain nothing by changing the core banking system.

If everything is "in core" the systems are very simple.

That is what we have done with SilviaCBS, it is all "in core" and we do our delivery via web browsers, not by using expensive PC based branch systems.

SilviaCBS is affordable for fiancial institutions regardless of size. Small and medium size banks can compete with the big guys.

Try it, you will be surprised.