What do core banking systems do?

what core banking systems do

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You may have heard about core banking systems, and you probably asking yourself what core banking systems do.

SACCOs offer various services to their members, from savings and checking accounts to loans and investment products. To provide these services, credit unions rely on core banking systems.

A core banking system is a software application that provides the backbone for a bank’s or Sacco’s operations. It enables you to process transactions, manage members’ accounts, and provide other banking services.

In the past, each type of banking service was managed by a separate system. But with the advent of core banking systems, all these functions are now integrated into a single system. This has helped SACCOs provide a better experience to their members.

This article will look at what core banking systems do and how they can help you provide better services to your SACCO members.


The Core banking system disruption

Core banking systems have been around for decades. So, what is the next big disruption in the financial services industry? The answer is artificial intelligence (AI).

AI will not replace core banking systems. Instead, it will complement the systems and help improve banking operations even further.

AI can transform the financial service industry by analyzing data, making predictions, and recommending actions. It can be applied to various banking functions, such as fraud detection and customer service. This can help your SACCO provide better services to your members and stay ahead of the competition.


What core banking systems do


Provide a central platform for SACCO operations

Core banking systems also help you streamline member transactions and operations.

For example, they allow you to integrate various front-office systems, such as your mobile banking system, agency banking system, ATMs, and internet banking platforms. This enables you to offer a seamless experience for your members.

When a new member joins, you can integrate his information from other systems. This lets them open an account quickly and easily with just a few clicks.

With a core banking system, you can also automate your account opening process. This lets you process more applications and reach more members. Automating the account opening process also ensures you follow your SACCO’s policies and procedures. It also helps reduce the time it takes for a new member to open an account.


Allow for easier loan management.

Managing loans is often one of the most time-consuming tasks for SACCOs.

A core banking system lets you track all your loans, repayments, and collections. It also allows you to integrate other systems, such as your loan management system. This enables you to track and follow up on your collections more effectively.

The core banking system also lets you monitor the health of your loan book. You can see the bad loan rates on different types of loans and take action as needed. This makes it easier to manage your loan portfolio.


Make risk management easier.

Another essential function of core banking systems is risk management.

Financial institutions use risk management to determine the level of risk associated with each member. This helps them manage their risks more effectively.

A core banking system allows you to integrate various risk management systems. This lets you streamline your risk assessment process. It also lets you monitor risks in real time. This will enable you to detect and respond to threats more quickly.

You can also use the core banking system to perform various activities that help determine the risk associated with each member. This includes verifying members’ identities and conducting KYC (know your customer) checks.

Core banking systems help you identify and mitigate risks associated with money laundering, fraud, and other criminal activities.


Managing accounts and members.

Core banking systems allow you to manage your accounts and members more effectively.

They let you set up and track savings accounts, checking accounts, and other investment products.

You can also use them to manage membership accounts and track new member applications. This helps you effectively manage your accounts.

It also lets you provide better customer service to your members. You can also use the system to create and administer loyalty programs. This will help you reward your most valuable customers and increase customer retention.


Financial management

A core banking system can be used to manage your financial information.

This can include information like cash flow, account balances, and more. By monitoring this information, you can better understand your financial situation. This can help you make more informed decisions.

You can also use the system to forecast potential issues and take action to prevent them from happening. A core banking system can also manage your finances across multiple channels, such as online and mobile banking. This can help improve customer service, particularly for members who prefer digital channels. This can also help you better compete against other financial service institutions.


Tracking loans and investments.

Finally, core banking systems help you track loans and investments. You can use them to track the current status of each loan and the member who holds it.

They also allow you to track the current value of your investment portfolio. This lets you make better investment decisions. It also helps you manage your assets more effectively.


Features of a core banking system.

While some of these features may not apply to all core banking systems, they are common features that most systems possess.

  • Single user interface – This is a single interface for all banking services.
  • User-friendly interface – The system has an easy-to-navigate user interface. This will help ease your members’ burden and speed up their transactions.
  • Advanced security features – The core banking system has robust security features, such as two-factor authentication, to protect your members against cyber threats.
  • Advanced reporting features – The system provides a wide range of reports to help you manage your operations more efficiently.
  • Ease of installation and integration – The core banking system is easy to install and integrate into your operations.
  • Multiple language support – The system supports multiple languages to cater to your international members.
  • Multiple currency support – The system supports multiple currencies to cater to your international members.


what core banking systems do for SACCOs



Core banking systems offer a wide range of features and functionalities that can be divided into three broad categories: credit management, banking management, and finance management.

These systems help SACCOs manage their member deposits, track loan repayments, and maintain accurate financial records. To learn more about how core banking systems can benefit your SACCO, book a free demo today.

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