CORE BANKING SYSTEM: WHAT IT IS, ITS BENEFITS, AND HOW TO SELECT YOUR BEST FIT.
A modern core banking system is fully computerized and uses online platforms as opposed to physical branches making SACCOs accessible from anywhere in the world at any time.
A core banking solution gives SACCOs more flexibility in their function and makes for greater convenience for all their members, regardless of their locations.
In this article, I will describe a core banking system, its benefits to your SACCO, how to select the best fit for your SACCO, and the best available examples.
What is a core banking system?
A core banking system is a software that provides an interface between financial institutions and their customers.
It allows storing the customer’s accounts, transactions, and personal data.
The system is commonly used to refer to the back-end of the banking system that processes daily banking transactions and posts updates to accounts.
- CoopMIS – cloud-based SACCO system Ideal for tier 2 and 3 SACCOs
- Dynamics 365 Business Central by Coretec –Ideal for tier 1 and 2 SACCOs. Available both on cloud and on-premise models
- The Olympic core banking system is a world-class and dynamic core banking system ideal for tier 1 SACCOs whose demands have overwhelmed homegrown systems and commercial banks.
There are many core banking software for SACCO across Kenya and Africa.
We rate them according to how well they automate the SACCOs processes, the various benefits it offers to SACCOs, performance, and system security.
1 CoopMIS core banking system (Best for Tier 2 and Tier 3 SACCOs)
CoopMIS is a complete system that automates all the processes in your SACCO.
CoopMIS has proven to be reliable for over five years based on experiences and feedback from 29+ SACCOs across Africa.
We have implemented CoopMIS in Kenya, Botswana, Uganda, Nigeria, and Eswatini.
This by far is the best solution the Sacco has offered its members, vendors & staff for all the problems they initially complained about. Prior to this, the Sacco had tried some other software. CoopMIS by Coretec is a solution in its own class. Superb Support from the team we were given. We appreciate all of you for always being hands-on with the support.” Lilian Aluoch – CEO, Agro-Chem SACCO
Dynamics 365 Business Central
Since 2002, Coretec has customized Microsoft Nav to fit SACCOs’ needs and serve as their core banking solution.
This solution has proven to be so powerful to the point that several Tier 1 SACCOs and commercial banks are currently using it.
Coretec has successfully customized and implemented Microsoft Dynamics to SACCOs of all sizes, including Stima SACCO, Harambee, SACCO, and Kenya Police SACCO, to name a few.
Technology keeps growing to meet SACCOs demanding processes, hence the availability of upgrade options to Dynamics 365 Business Central. A dynamic and secured system for SACCOs.
The Olympic core banking system
Olympic by ERI is a powerful core banking software used by over 400 financial institutions across 60 countries globally.
Olympic is the best solution for Tier 1 SACCOs with demanding processes that overwhelm systems like Microsoft Dynamics 365 Business Central.
Rated number 2 core banking system globally by Gartner, Olympic is a solution for any Tier 1 SACCO or commercial bank that wants to get to the next level.
Factors to consider in a core banking system
There are several core banking systems worldwide, and not all qualify to serve you better. Here are a few factors you should consider when looking for one.
- Security and environment stability
- Upgradable options
- Integration with third-party systems
- Compliance with SASRA or any other SACCO regulator
- User experience
- Ratings and reviews from other SACCOs
Benefits of a core banking system to SACCOs
Reduce the cost of operations
The cost of operating a SACCO is a lot, especially for those with FOSA services.
A centralized database reduces the need for duplicate data entry, manual processing, and other inefficient tasks. This leads to reduced operating costs for the bank.
The system helps your SACCO reduce the resources involved in manual processes through automation, reducing the costs involved in day-to-day operations.
Improves efficiency and service delivery
Your SACCO can improve its overall efficiency and accuracy by automating manual processes and consolidating data into a single system. This can lead to reduced operating costs and improved customer satisfaction.
Your members can get quick services and products that serve their particular needs.
A core banking system offers customers a more streamlined and efficient banking experience. This leads to increased customer satisfaction and loyalty.
Compliance with authorities
A sound SACCO system will help you comply with SACCO regulators such as SASRA for those SACCOs in Kenya.
CoopMIS, core banking system, comes with automated SASRA reports. This feature helps SACCOs comply with the regulator by sharing their relevant and accurate reports at all times. For instance, SASRA requires SACCOs to send them a report on a re3gular basis without fail.
Flexibility in SACCO operations
SACCO operations can get complex and with more lengthy procedures most of the time.
Without automation, most members would be very frustrated with services from their SACCOs because the turnaround time would be longer, leading to poor services.
A centralized system allows cooperative societies to offer new products and services quickly and easily. You can also tailor their offerings to meet the specific needs of your target markets.
With all critical data stored in one secure location, your credit union can better protect its members’ information from external threats. You can also track and monitor activity for signs of fraud or abuse more quickly.
Improved decision making
By having access to real-time data and comprehensive reports, banks can make more informed decisions about strategic planning, risk management, and resource allocation.
A centralized core banking system will give your SACCO a competitive advantage in today’s marketplace. It allows you to offer more innovative products and services while reducing costs and improving efficiency.
Improved risk management
A core banking system provides banks with improved visibility into their operations. This helps them to identify and manage risks more effectively.
Standard features of a core banking software
- Onboarding of new SACCO members
- Members account management
- Managing deposits and withdrawals.
- Credit management and disbursal of loans
- Managing members and the SACCO’s transactions
- Calculation and management of interests
- Payments processing, i.e., cash or cheques
- Designing new SACCO products.
- Managing all branches at a centralized point
- We are establishing criteria for minimum balances, interest rates, number of withdrawals allowed, and so on.
Core banking system free demo
Of course, before procuring a core banking solution for your SACCO, you need to have a practical demo, which takes you through the system’s capabilities and how it can help you overcome your challenges and reach your objectives.
Contact us today at +257 702111000 or email@example.com to request a free demo.