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How to Choose a Digital Core Banking Platform?

The right core banking platform can make or break a business. Compared to outdated legacy systems, modern digital core banking platforms offer more services, flexibility, and opportunities. Current technology can help digital banks and fintechs dramatically improve cost-effectiveness and increase their competitive advantage. 

Choosing a core digital banking platform requires a good understanding of your business, from strategy, budget, and technical capabilities to timeframes, standards, and relevant regulations. However, when choosing a core banking platform provider, you should consider the following criteria to find the best solution for your business.

 

Future-proof microservice architecture

The capacity to roll out new features quickly has allowed modern digital banks like Revolut, N26, and Monzo to capture a significant market share in different markets worldwide. Compared to a traditional bank’s app that gets only a few updates annually, Revolut releases an update weekly. You can learn more about what it takes to build a Revolut-like digital bank in our previous article

The ability to roll out new features rapidly comes down to microservice architecture. The technology increases flexibility as new services, integrations, changes, and customizations can be added to the existing product. The microservice architecture allows to take the innovation to an entirely new level as businesses have ready access to their technology. 

 

Short time to market

With ever-changing customer preferences and rising competition in the financial industry, banks and fintechs must be agile to respond to market changes or risk losing market share. Launching new digital products and services quickly and tailoring them to new demands through rapid iterations plays a vital role in successful business development. 

The right digital core banking provider will offer a platform with all main banking functionalities: customer onboarding, accounts opening, bank card issuing, KYC, money movement tools, payments, currency exchange, and support, among others. With these features, banks and fintechs can launch their solution with predefined functionality in a fraction of the time it would take to develop it in-house. 

Then, functionality can be extended to add new features to improve the banking experience for your customers. Adding more complicated operations, additional security measures, and countless integrations with financial, payment, and insurance providers can truly be unique. 

Another important point is that the core banking platform provider should offer white-label front-office – web and mobile banking applications. It is much faster to rebrand and customize existing solutions than developing them from scratch, which can easily last longer than six months. With ready-made applications adapted to your business, you don’t waste months to enter the market and lose out on potential customers. 

 

Open banking ready

PSD2, the Revised Payment Service Directive brought into law in 2018, aims to spur innovation and acknowledge the rise of fintechs, ensure security and protect customers, level the playing field for challengers, and herald the beginning of open banking. It is essential to consider the European legislation when choosing a core banking platform and its respective architecture. 

Core banking solutions that rely on open APIs can be easily integrated with third parties and other banks in the financial ecosystem to create new useful products and services. Loyalty, budgeting, and insurance products made through partnerships and connected through APIs already generate value for banking customers. Connections between services not only add new features to your products but create new revenue streams and opportunities. 

 

Accessible and available integrations with third-party providers

A digital core banking platform is much more than just a foundation for front and back offices. Modern core solutions enable banks to create complex but efficient systems of connections and integrations for their business. Expanding functionality through integrations with an ever-increasing number of service providers is cost-effective and agile.  

Whether its banks, currency exchange, KYC, remittance, or payments, digital core banking providers should have accessible integrations that work with the product and technical support for any additional integrations. With an integration framework and a flexible infrastructure, banks can innovate and roll out products and services ahead of their competition. 

Global core banking software providers like SDK.finance provide technology and support banks and fintechs of all kinds at every stage of the digital transformation from market research to product launch and scaling. The digital retail banking software is available in all popular formats: web, iOS, and Android applications that help to reach the new generation of mobile customers quicker. 

Not to mention that SDK.finance is offering a 1-Year payment deferral for all companies with financial licenses issued by any country to help minimize the negative economic impact of the global COVID-19 outbreak. 

Banking customers can benefit from a modern and secure experience guaranteed by two-factor authentication, biometric checks, security notifications, and Strong Customer Authorization for payments.

The Platform consists of 5 main components: a back-end wrapped in 400+ API endpoints, 3 front-end frameworks, and a web for system management with capabilities in iOS and Android for our clients.

Advantages of software that is built on API-first architecture:

  • The speed of releasing new features and functionality is much faster
  • The cost of ownership is more economical
  • Fewer bugs and more stable products exist
  • Better flexibility, scalability, and features are just some of the advantages of the SDK.finance core banking software ready for German banking.

Click here to find out more about the digital retail banking software solution and how it can help your business unlock new opportunities.

 

Written by Alex Malyshev on Aug, 10, 2020

#Banking software