Why Banks need to modernize their Core Banking system?

Overview of Pakistan’s banking sector

Pakistan’s banking industry thrived tremendously over the last few years, with consistent growth witnessed in operations, customer penetration, and profitability.
New leagues of branchless banking operators, Electronic Money Institutions (EMIs), POS/PSP operators, etc., are emerging in the industry bringing innovation in banking services & modes of operations as customers are moving away from the brick-and-mortar model. Central Commercial banks also focus on innovation to offer new and improved digital banking services in Pakistan.

Pakistan’s banking infrastructure comprises 44 commercial and microfinance banks with over 16,500 branches. According to the Payment System Review of the State Bank of Pakistan (SBP), the number of Bank accounts in Pakistan maintained by Commercial banks surged to over 62 million by December 2021, while the number of accounts registered by branchless banking operators soared to over 78 million.

Why is Core Banking Modernization essential for Banks?

As the Pakistani Banking industry is witnessing large-scale changes and a shift in the way customers bank, a Bank’s transformation is now more essential than before.
Core banking modernization is crucial for Banks of today as an up-to-date back-end system is required to process daily banking transactions and update accounts and financial records, including deposits, loans, and credit processing. Hence it is safe to say that a Core banking system is the backbone of any financial institution.

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In Pakistan & across the world, significant Banks rely upon modernizing their Core by implementing state-of-the-art banking software and an implementation partner with the right expertise who can understand the Bank’s needs. One such implementation partner specializing in Core Banking modernization is NdcTech, a leading IT company and an award-winning partner of Temenos, focused on transforming central Banks across the globe. NdcTech retains a global footprint, with offices in Pakistan, Singapore, UAE, and rich expertise in serving over 100 Banks in 29 countries across the globe. NdcTech also provides other services to build banks for the future, such as digital banking, managed services, consultancy, and banking on the cloud.

The company not only modernized the Core Banking System for major Banks within Pakistan, such as State Bank of Pakistan, Meezan Bank, Telenor Microfinance Bank, Bank of Khyber, and Samba Bank, but it also transformed the Core Banking platform for various International Banks such as Capital Bank of Jordan, National Bank of Kuwait, Tourism Development Fund KSA, Ziraat Bankasi KSA, Amlak International, & Export Development Bank Sudan.

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The backbone of a Bank’s infrastructure is a robust core banking system that improves the capability of Banks to facilitate their customers with more innovative services. It minimizes human intervention, thereby limiting errors; helps prevent frauds and thefts with real-time banking facilities; reduces operational costs, & aids in studying changing customer demands. To transform the landscape of Pakistan’s banking system from the conventional brick and mortar model, Core Banking modernization is essential for Banks to remain relevant and sustainable.

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