#ShareTheCore - Sharing economy for the core banking world
At Ideal Invent, we all understand that most of what the Core does, including payments, is commoditized and the ‘Edge’ that banks have is more on the digital front. So, keeping in mind cost and other capital constraints, it is prudent for banks to look at “#ShareTheCore” as an essential strategy to stay relevant in disruptive headwinds.
How is #ShareTheCore relevant for you:
- If you are a large multi-country bank dealing with multiple core banks even for similar geographies running
- If you are a bank that aims to reach other geographies or start new business units across geographies with a
- If you are a bank that aims to act as an aggregator for core bank for other similar sized banks in your region.
- If you are a bank that aims to gain from sharing your version of the Core with other similar banks in your
country to bring down the TCO manifold.
Why #ShareTheCore is relevant now?
- A seamless multi-entity, multi-tenanted solution is what you need either on-premise or hosted to reduce your
core costs across your units.
- Core bank costs typically come to 12% of your entire organization cost – it could be higher in highly
automated countries (western economies) and lower where manual replacements are at play (South east
- #ShareTheCore can bring this down manifold if you are addressing this for multiple entities – either of your
own or across banks.
- Middleware orchestration advancement and API libraries have matured a lot in the past decade bringing down
- Digital / Channel differentiation has gained upper hand and the digital layer is on fast track which needs much
of your valuable budget.
- Products have become simpler especially on the retail side - if the customer doesn’t understand your product
chances are they wont sell.
- Pricing, risk, process and controls are the only edge banks have in an increasingly reducing margin game.
At an operational level #ShareTheCore can be employed as follows:
• #ShareTheCore can apply for 3-4 similar banks that are of similar size and similar business model in a certain
• It can also apply for a single bank having entities in multiple countries to share a single platform.
• The core will be the same for all and it will be a single version. However this singular core can handle different
bank set ups (either hosted on a community cloud or on-premise).
• The core will provide service orchestration for each bank to plug in their (digital) customer service layer.
• Interfaces like KYC, credit scoring, Clearing, Tax - will be made available to all banks as a part of a standard
package for a particular country and hence bring down the costs.
• Compliance reporting to FSA/ Central bank will be standardized and made available to all the sharing banks.
How do banks benefit from it?
• Banks get a version exclusively for their group. This version will have all the ingredients they need and with
the right next generation core banking vendor it will remove the need to buy a universal system at an
exorbitant cost – many of which is not used.
• Banks will buy a license or own the code at a shared cost. Banks share customization for the core – for any
regulatory issues, clearing handoff changes, new changes to payments etc. So the entire cost of the core
can be spread across participating players.
• Because there is a single version of the entire set, it makes for easy maintenance and upgrade.
• With a multi tenanted core the #ShareTheCore concept will allow banks to have complete distinction at the
business layer in spite of sharing the underlying core platform. Banks can have a fully independent pricing,
risk management and monitoring structures for all their services.
Speak to us to know how we can assist you on #ShareTheCore to achieve quicker and better RoI on your Core bank investments.