transfer - Economic Development and Employment Promotion: Project
transfer - Economic Development and Employment Promotion: Project
transfer - Economic Development and Employment Promotion: Project
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4 | Steinbeis<br />
Core banking systems compared<br />
St<strong>and</strong>ard or customized?<br />
Large banks often develop their own core banking software, <strong>and</strong> are selective with their use of st<strong>and</strong>ard<br />
solutions. However, small <strong>and</strong> medium-sized banks often use core banking software provided by software<br />
companies. This software has to be specially adapted to their needs. At savings banks <strong>and</strong> cooperative<br />
banks in Germany, these core banking systems are provided to local branches by group IT departments.<br />
Banks like these have undergone extensive consolidation in recent years, allowing for huge economies<br />
of scale. Simultaneously, their IT systems are being modernized. This contrasts to the market for core<br />
banking systems used at small, independent banks, which is dominated by a variety of well-established<br />
solutions. In a recent study, Steinbeis staff at the Focos Transfer Center Research | Consulting | Studies,<br />
Karlsruhe University of Applied Sciences investigated the current market for core banking systems.<br />
The term “core banking system” has no uniform<br />
definition <strong>and</strong> is commonly used to<br />
mean two different things. In the broader<br />
sense, it refers to a complete banking system,<br />
which generally includes all products,<br />
sales channels, reporting systems <strong>and</strong> control<br />
modules. The second, narrower interpretation<br />
is only used to describe the classic<br />
product area of payments, lending <strong>and</strong><br />
deposits, plus legal reporting requirements<br />
<strong>and</strong> rudimentary support for different sales<br />
channels.<br />
The market for core banking systems in Germany<br />
is not very transparent. From a cus-<br />
Photo: © iStockphoto/Nikada<br />
TRANSFER 02|2010