by Banking software is enterprise software that is used by the banking industry to provide and manage the financial products they provide. Within retail banks, banking software typically refers to core banking software and all its interfaces that allows them to connect to other modular software and to the interbank networks. Within investment banking, banking software typically refer to the trading software used to access capital markets.
Retail banks
Commercial or retail banks use what is known as core banking software which record and manage the transactions made by the banks’ customers to their accounts. For example, it allows a customer to go to any branch of the bank and do its banking from there. In essence, it frees the customer from their home branch and enables them to do banking anywhere. Further, the bank’s databases can be connected to other channels such as ATMs, Internet Banking, payment networks and SMS based banking.
Banking software is used by millions of users across hundreds or thousands of branches. This means that the software must be managed on many machines even in a small bank. The core banking system is a major investment for a retail banks and maintaining and managing the system can represent a large part of the cost of running a bank.
Investment Banks
Investment banks use software to manage their trading desks and their clients accountants. These systems often connect to financial markets such as securities exchanges or third party providers of such as Financial data vendors.
For example, a company such as Bloomberg is financial software, news, and data company that offers financial software tools such as analytics and equity trading platform to financial companies around the world through the Bloomberg Terminal. Another example is Reuters whose products specialize in financial information management, purchase order management, positions and risks, and financial instrument sales.
These types of companies provides solutions for control and overall productivity for corporate treasury, improved workflow, central banking, bank treasury, Forex trading and global back-office operations. Examples of these back-office tasks include IT departments that keep the phones and computers running (operations architecture), accounting, and human resources (customer relations) and sales and marketing where they come in contact with their customers.
With the help of these software companies, there is efficiency and proper management of transactions both in the front and back offices of the banking firms and other financial institutions.
Banking Software Features & Capabilities
Features common to core banking software are:
- Real-time account & transaction processing
- Financial product builder
- Customizable interface and product workflow
- Customer self-service portal & management
- Online payment processing & bill pay
- Source capture & remote deposit
- Customer interaction (e.g. live chat)
- Account-holder transaction history tracking
- Account-holder data & document store
- Multi-currency funds management
- Financial instrument workflow
- Accounting workflow
- Mobile app development
Banking Software Integrations & Ancillary Products
Because of compliance rules peculiar to banking, banking software vendors offer suites of ancillary products. These may cover the business needs for specific kinds of financial institutions. Some modules and add-ons from popular vendors cover:
- Fraud risk management
- Financial crime mitigation
- Line of credit & credit background check
- Loan origination & servicing
- Corporate supply chain financing
- Customer wealth management
- Investor servicing & accounting
- Enterprise content management
- Marketing resource management and automation
- Banking investment & operational intelligence
- Support for Islamic banks
Pricing Information
Because banks vary widely in size and specialty costs of banking software vary in the extreme. Few banks meet their needs with simple subscription-based offerings. Banking software tends towards very high modularity and pricing depends on the breadth of modules and services required, as well as licenses and installations.
