Best Banking Software

The unprecedented forces of change in the competitive landscape of the banking sector, stringent regulations, dynamic financial arena, and fast-changing customer needs have compelled banks to transform existing processes, operational models, and even the age-old banking IT solutions. Increased adoption of online payments, online portfolio management, and penetration of online technology in core banking services have powered customers to engage more closely with their banks and also enabled banks to deliver personalized customer experience and faster delivery of products and services. 

The banking industry has integrated and adopted technology to retain customers and stay competitive in the financial world. However, the technological curve demands banks to constantly upgrade their systems and find pinpointed solutions for their specific needs. Before investing heavily in any software solution, banks must get themselves aware of all features and functionalities that constitute a banking software system. With several banking solutions luring the clients with promising banking operations and tasks, making a decision to buy the most suitable and cost-efficient candidate is a herculean task. This buyer's guide, therefore, aims to assist you in selecting a trustworthy banking software solution. We have discussed in detail all essential aspects that are of paramount importance when it comes to making a buying decision of banking software. 

Traditional banks never lived in an era of cloud computing, artificial intelligence, encrypted technologies, and Banks have witnessed the migration from the old IT architecture to the new cloud-dominated services provided by giants such as Microsoft, Google, Amazon, Oracle, and more. Traditional banks never heard of cyber attacks, data theft, privacy issues, automated operations, personalized banking, etc. Today, banks have migrated their legacy systems to rope in the latest digital banking solutions that reengineer and reverse reengineer all banking products and services to achieve sustainable business growth for banks. The latest concepts such as 'anytime, anywhere banking has contributed greatly to technological innovations to open up new platforms for bank account holders to carry online transactions, card payments, and mobile payments. Traditional banking was business-centric. Modern banking is customer-centric. For saving costs, usage-based billing advantage, adoption of Green IT, and business agility banks have entered the technology arena for meeting the needs of the modern business environment. 

The challenges due to disruptive technologies, radical competition from FinTech firms, ever-changing regulation, and repo rates, compliance pressures, privacy concerns, liquidity issues, increasing customer expectations have intensified in the current times. The costs associated with compliance are very high.  

The greatest threat is from constant cyber-attacks. The International Monetary Fund noted that the potential loss due to cyber-attacks in severe scenarios could be as high as $270 billion to $350 billion annually. Such security breaches take a toll on the overall profitability of banks.

With an increasing number of private banks, the entry of new Fintech players, and multiple options available in the banking area, clients expect a personalized experience. Client loyalty and retention is rapidly becoming outdated idea. Banks have to detect and fight scams and fraudulent transactions. The increase in non-performing assets, wilful defaulters, and bad loans due to poor credit risk assessment is also a major challenge that banks need to mitigate. 

Technological assistance and constant innovation can help banks to fight all these challenges. Banks know that digital transformation is the critical differentiator that can help them to overcome all banking challenges. Banking software is the first step they can take in the path of sustainable development. 

Banking Software is a comprehensive term used for applications and software solutions for core banking, investment banking, financial services, and capital markets. This software provides tools to automate, manage, and simple corporate banking, SME banking, Wealth Management, Asset management, trading platforms, credit organizations, and more.  Designed to make the life of bankers, banking clients, and employees easy, these tools have all features to run the core banking operations efficiently. 

Desktop-based/On-Premise 

These types of banking system software are licensed, and banks can install them within their IT infrastructure. On-Premise banking management systems are highly customizable in nature.  Banking organizations seeking banking software solutions for optimum results and who prefer keeping their data on their own servers can opt for desktop-based banking systems. 

Web-based

These types of online banking platforms are hosted, and third-party digital banking solution providers offer these tools. Web-based online banking platforms are very popular as apart from the bank admins, customers, bank agents, and employees can also access these software solutions from anywhere with a  login ID and the password provided by banks. 

Cloud-based

These types of banking management software are hosted through third-party cloud service providers such as Amazon web service, Microsoft Azure, etc. These are popular with large banking organizations that require massive data storage capacity and extreme flexibility. The cloud-based banking software solution is a SaaS (Software as a Service) that allows banks and their customers to access the services using internet-enabled devices. 

Open Source

These types of core banking software allow users to customize source code, modify inbuilt settings, and add extra plugins to enhance the capabilities, functionalities, and utility of the software. When banking organizations need to accommodate specific features in their banking software solutions that are unavailable with any vendor, then open source banking software can opt. 

For ease of transactions

Banking software has made the lives of both bankers and customers easy. Banking software allows bank account holders to access banking services, in real-time. Implementing it means easing the transactional activity.

For 24/7 functionality

Without software, banks cannot provide 24/7 functionality and around-the-clock service.

Increasing account holder's trust: 

When service requests, queries, fund transfer processing are in real-time, and loan sanctions are through a high-speed digitally automated process, the account holders are more likely to trust the banking organization.  

Ensuring regulatory compliance:

The financial ministry of every nation and regulatory body frequently asks the banks to submit various financial documents and reports related to their transactions, customer bank account details, and related liquidity information. Mostly such requests are on an urgent basis. For example, if the finance ministry wants the banks to submit the details of all account holders having more than a million dollars in their current or saving accounts, then banks having banking software need not take any stress. They will just have to filter, segregate, and download the information with a few clicks, and information will be available in any format (PDF, CSV, Excel) they need.

To Safeguard valuable data: 

Banks have records of account holders' personal details, financial assets data, copies of various identity proofs, and tax information that can be misused by fraudulent imposters or scammers if leaked. The two-factor authentication and password-protected layered security of banking software provide a shield to banks for safeguarding their valuable data and honoring their customer's privacy.

For Ensuring High-security

Stringent adherence to high-end security features is a foremost criterion for banking software. Double-factor authentication, multiple-layer of security, and encrypted networks make transactions secure and hacking-proof. 

Management of corporate treasury

Since the 2008 financial crisis, a lot of changes have been made in the corporate treasury part of the banking business. Greater transparency to protect account holders' money is a fundamental aspect of banking laws. Banking software is essential to access financial market data and assess risky investments for corporate and institutional investors. 

Improved bank workflow

With automated financial service solutions, progressive banks can improve their workflow and automate complex processes. With an automated classification of documents, extraction tools, advanced search features, and validating processes, banks can enjoy a faster and error-free workflow. 

Centralized Banking 

With every data, quantifiable information, and business process available to all employees of a bank, a uniform approach can be maintained across all branches. In decentralized banking processes, managers can provide loans considering the soft data such as the customer's relationship with the manager, but it can be very risky. A banking software centralizes everything so that managers can adopt a quantifiable approach to credit assessment before sanctioning any loans.

Bank Treasury

Banking software keeps a record of all the capital that the bank's treasury possesses in real-time. It helps to control and manage the bank's money efficiently for daily operations. 

Trading

Today banks are involved in large-scale transactions of gold, stocks, bonds, and debt instruments for trading purposes. A banking system can be used to set algorithms to help banks in buying and selling profitably. 

Friction-free back-office operations

With robust automation features of banking software, the back-office staff can work efficiently without hassle. It has a module to handle and automate back-office operations such as clearance of cheques, drafts, customer applications, etc. 

Without banking software, banks would not be in a position to analyze the data of their customers to come up with meaningful conclusions. It would be difficult to manage the mammoth work manually. Banks won’t be able to efficiently tackle regulatory changes, operational requirements, and customers’ demands. Without a robust banking system, mapping customer demographics to come up with new products, or meet dynamic business demands is not feasible. 

A banking software solution is capable of handling the following functions:

• Core banking
• ATM
• Internet Banking
• Mobile Banking
• Payments network
• SMS Based banking
• Card management system 
• Trading services by Investment banks (Capital markets)
• Financial data management
• Multi-currency management
• Wealth management
• Customer management
• other banking products

Customer satisfaction and robust customer experience

One foremost benefit of the banking software is that you equip all your bank employees with the necessary information to deal with clients' issues. For instance, a customer who has called the bank to enquire about a deducted charge from his savings account abruptly asks a random question for his loan information too. His call is not transferred to the loan department; rather, the bank official solves the query. You can imagine how satisfied the customer would be to know that the bank knows his profile thoroughly. A single database available to all employees and Omnichannel banking solutions using the banking software can work wonders for your banking business.

Increasing productivity

Bank managers can automate tasks related to everyday core banking operations, service request proceedings, sending marketing emails to the customers, and enabling self-service portals for clients. When banks can complete a lot of tasks without the customers having to either contact the bank or visit the branch, it increases the productivity of the bank and saves time and employee cost. 

Reduced need for workforce

Banking software reduces the need for the human resource required at individual branches to run its operations. 

Multi-branch activities from one point

Banking software brings all branches of the bank on a single interactive platform. All core banking services can be monitored and controlled from a single dashboard. 

Banks get assistance in all core operations of the banks, such as:

• Everyday banking transactions
• ATM transactions
• Internet Banking
• Fund transfers
• Account opening and closing
• Mobile Banking
• Payments network
• SMS Based banking
• Card management system 
• Multi-currency transactions
• Customer service requests

Finding a banking solution that provides value for money, customized, hassle-free, and comprehensive services will surely make a difference in your banking business. The type of banking software solution can vary from bank to bank based on your requirements. There are, however, a number of essential factors to keep in mind before investing in the right banking software solution. Hence, before you select a particular banking system, make sure that the banking platform you have chosen is capable of answering all below questions in an affirmative:

• Does it provide adequate features, functionality, integrations, and settings for your needs? 
• Can you customize the software or request to add more functions over time?
• Is the banking software user-friendly for your account holders and employees? 
• Does the software deploy a robust encryption system for all transactions and communications? 
• Can it work with low bandwidth internet connectivity?
• Is your banking software vendor well-experienced in the banking solutions area?
• Is the Return on Investment (ROI) greater than the overall expenditure on the software?
• Does the vendor provide a free trial/free demo of its services?
• Are you going to get free customer support services from the banking software provider?
• Is the software deployable in multiple types of devices?

If the answer is yes to above all questions, then surely you are considering buying an industry-grade professional software service. 

Data privacy is a growing concern for all banking institutions around the world. Even when customers have become savvier in the use of technology, hackers and cybercriminals find new ways to exploit the sensitive customer data for fraudulent acts. With stringent government and regulatory measures, banks have to gear up to meet the privacy standards demanded by customers and regulators. 

Data breaches exposed4.1 billionrecords in the first six months of 2019.

It is the professional responsibility of banks to make their customers feel safe and secure about their hard-earned money. Failing in this part can have devastating consequences on banks' business. Banks having a high regard for account holder's data privacy are the first choice of investors to park their money. Banking software has features and necessary applications to provide banks with a rigorous security system to protect all types of sensitive data. Banking software solutions follow the global guidelines for data protection such as GDPR (General Data Protection Regulation) of the European Union and  Payment Service Directives, which forbids financial institutions to collect and reserve any personal data without explicit customer consent.

IoT

In IoT-enabled banking, millions of devices are connected to each other through an intelligent system sharing data on cloud servers. Banks collect data from the devices that customers are using for availing banking services, and based on the data collected; banks offer personalized services to customers. IoT enables banks to collect data from credit card/debit cards (IoT enabled POS transactions), ATMs, mobile devices, laptops, etc. Banking software can help in analyzing the IoT data into valuable insights. For example, banks can reduce the number of unused ATMs based on the data, based on card transactions, and find locations to install more POS at particular places. 

Artificial intelligence

Conversational AI is used for chatting with customers, cognitive AI for customer services, AI-powered AML (anti-money laundering) for fraud detection, and face-recognition AI for security purposes. Banks are also utilizing AI for credit assessment, risk management, and understanding behavioral finance. The banking software has AI-enabled features that reduce cost, detect suspicious transactions, and increase ROI.

BlockChain

Blockchain's distributed ledger provides a tamper-proof data structure to banks. Blockchain technology increases transparency, reduces theft, and fraud occurrence. Blockchain is an immutable transaction record that notes the ownership of every asset in the blockchain. This record is almost impossible to hack. It is a revolutionary technology that provides a highly secure way of payment that removes the need for middlemen and creates a ledger that is not monitored or controlled by any single entity. 

Wearable Gadgets

The adoption of new digital devices has driven enormous changes in retail financial services. The retail banking sector has been enormously transformed by digital devices. It helps banks in better understanding the customers.  Wearable devices can authenticate customer identity without the need for a password. This mitigates the issues related to password theft or forgotten password issues. Wearable devices like watches can identify their owner by the size of wrist veins, voice analysis, heartbeat, etc. Even if someone steals it, the watch can identify that its owner has taken it off.  Wearable devices can help banks to project the interest growth chart on a wall through smart glasses. 

Data analytics

Data analytics and machine learning algorithms can help banks to predict significant customer actions. It reduces customer churn rate, improves margins, increases customers' likelihood to buy particular bank products, etc. Data analytics assist banks in scaling up the business and taking strategic calls on business. Data analytics is essential to predict and understand the high potential customers, increase or decrease in profitability with changes in regulations, identify high-value prospects, risk propositions, and product profitability.

Personalized banking

For every $100 billion in assets that a bank has, it can achieve as much as $300 million in revenue growth by personalizing its customer interactions. By analyzing customer spending behavior and transaction patterns, banks can come up with personalized solutions for the banks. Banks expose customers to personalization in marketing emails and other digital content about their products. Customers feel special and respond better to further marketing calls. 

Payment Banks and Payment Wallets

Even with the current restrictions regarding the number of deposits, loans, credit cards, and other core banking products that payments banks cannot offer, Payment banks and wallets have created a significant market share in the banking sector. Payment banks increase financial penetration and inclusion in areas where banks are unable to do. Mobile payment wallets have already shown a large-scale acceptance in the world. Going with paperless transactions that are recorded at both ends has become a norm.

Emergence of Fintech

Successful banks are agile. They know how to build a healthy financial ecosystem. Fintech has disrupted the banking industry, but it also provides banks an opportunity to render advanced customer services.  Fintech can offer financial services to participants who don't even have bank accounts. This type of financial inclusion makes Fintech a lucrative business. Banks are now developing Fintech models and architecture to reap benefits in the long term. A collaborative approach of Banks and Fintech firms to drive innovation through a hybrid financial institute is the future of banking. Successful banks are agile. They know how to build a healthy financial ecosystem with the help of online banking software.

Cryptocurrency

Cryptocurrencies have a significant impact on the banking industry, owing to the former's exciting features. The banking and the currency system are bound to get a new dimension due to the revolutionary bitcoin technology. Bitcoin and blockchain thrive on decentralization, and banks will follow suit.  Once banks and regulatory bodies accept cryptocurrencies as an integral part of the current financial system, the decentralized system will bring more transparency and security to the banking system. Online banking software can help to regulate cryptocurrency transactions for banks.

Cloud computing

Cloud computing offers banks the advantages of pay-as-you-go services by breaking the expenses on the storage of huge data into an ongoing operational cost. Banks need not invest a large up-front amount for new hardware and software for storing data over internet servers. Banks can also focus more on customer services and core business as the liabilities to protect and manage data on cloud servers, back up, and storing data lies with the cloud computing service of online banking software. 

Agile Technology

Agility is now a core pillar of financial institutions that lets them provide efficient responses to the changing needs of customers. Banks are also going for mergers and acquisitions of Fintech companies to move the non-critical services to these IT companies so that banks can focus on banking and less on IT needs. The current customer culture requires banks to focus on speed rather than size, and the need for shorter new product development cycles is more than ever today. Technologies such as cloud computing, API (Application programming interface), and AI have allowed banks to change their back-end operations without the risk of halting business operations for technological upgrades.

Compliance Tracking

Banking software allows third-party verification/audit agencies to integrate their software with the banking solution to check and verify compliance with the current regulations. Banks need not maintain a separate folder of all documents during audits. The current storage provided by banking software has all files stored in an organized manner that audit agencies require. 

Credit Card Management

This feature takes care of the credit card section of banks such as - Online issuance of credit cards, bill generation, an advanced overview of credit card expenses, monitoring of credit card limits, credit card frauds, loyalty points, payment records, and card security. 

Online Retail Banking

This feature enables an Omni-channel strategy that opens all channels of retail customers to carry out financial transactions, payments, and transfers, transaction tracking using online banking. 

Double factor authentication (2FA)

This feature mandates all users of banking software-bank admins, employees, agents, and customers to verify their identity through a 2-factor authentication process. 2FA adds an extra layer of protection (biometrics such as fingerprints, or facial scans, or security tokens such as mobile OTPs or personal verification questions) to identify the user beyond the username and password.  Some high-end banking software maps not just the iris but the eye's blood vessels to verify the high profile, corporate account holders. 

Customer Portal (Do it yourself portals)

Customer portals give customers access to 'do it yourself portals' consisting of sections where customers can edit and update their personal information or request an update. Customers can do various banking activities on their own. 

Integration with the Mobile Banking app

The banking software can integrate with mobile banking applications to share data and functionalities. 

Investment Banking

Nowadays, banks sell various investment products, mutual funds, debt instruments, and other investment products. This feature is of particular importance to investment banks to manage and organize investment products. 

Loan Management

This feature provides a separate module for loan management. This automates loan applications, loan approvals, credit report preparation for clients, loan disbursal process through an innovative and differentiated set of services to customers. 

Multi-Currency

This module provides banks to work with multiple currencies and manage currency fluctuations efficiently. 

Risk Management

This feature helps banks gather business intelligence & customer analytics to orient themselves for any unforeseen event and sudden financial collapse. Security Management

Financial Accounting

This feature of banking accounting software takes care of all accounts and documents mandated by regulatory bodies.

Other features 

Big Data Analysis, Cloud-enabled technologies, Artificial Intelligence (AI) for fraud detection and prevention, Marketing features for branding,  Integration with regulatory compliance mechanism, blockchain, and many more premium features are provided by banking software solution providers. 

The costs of banking software also depend on a large number of factors such as:

• Features it offers
• Type of installation: Web-based, cloud-based, or on-premise software, open-source
• User interface and experience
• Privacy and data integrity provides
• Number of admins it allows
• Quality of service offered 
• Number of employees and customers that it needs to manage

These variations can significantly alter the costs and estimations of the software. The average cost for buying banking software with enterprise version benefits depends upon the type of transactions and functionalities you need. Apart from this, some vendors may charge for installation and training.

EBANQ will cost you $16000 as a one-time fee.  If you are looking for free and open-source software, go for MyBanco.  For other banking management software such as T24 Transact, Bankware, Mambu, Coreplus, Finacle, and Quicken, you need to contact the vendor for detailed piercings. You can get all information from the GoodFirms banking software page. 

Big data and artificial intelligence have provided banks with eyes to see beyond the daily transactions. Banks can now see the daily lives of their customers. Banks know what digital equipment their customers are buying, which malls their customers are going to, and what kind of investments their customers are interested in, and how many of them have not visited their branches, and many more other facts. Based on the understanding of customers' behavior, banks strategically devise new personalized products for customers. Digital banking software not only streamlines banking operations but also assists the customer in carrying out financial transactions on their own. This provides the customers with a sense of security, self-reliance, and ease of doing transactions that bring them closer to their banks. Banks that embrace emerging business models and technology, and adopt a customer-centric strategy successfully capture the banking value chain. 

The foreseeable future is no exception. As traditional modes of banking revenues erode with time, banks have to come up with new revenue models by investing in digital resources. Banks investing in banking systems and online banking platforms are poised to fare well than their peers. 

Goodfirms is a leading IT market research giant that reviews, categorizes, and lists thousands of IT services and products to provide buying assistance to service seekers of the IT products and services. GoodFirms' experience and understanding of the IT market products can be very beneficial for the service seekers in selecting the best suitable software service for themselves. Currently, GoodFirms has listed more than 9000 products and services with around 15000 reviews that provide the buyer a bird's eye view into the features, pricing, type, and many more aspects of a software application. GoodFirms has explored, recognized, and analyzed the industry-leading digital banking solutions after a thorough research process and has come up with the list of best banking software solutions. The readers of this buyer's guide for banking software are advised to explore the list to find the best suitable core banking software for themselves.