The core banking system sits at the heart of every bank’s operations, powering everything from account management to loan processing.
If yours is due an upgrade, then you’re not alone.
The average bank changes their core banking system every 20 years, which means most financial institutions are running their entire infrastructure off a system that came out when you still needed a DVD to watch a film at home. That kind of slow pace doesn’t work for today’s market, where digital banking adoption has surged, with over half of the world’s population using digital banking, reaching over 4.2 billion digital banking users in 2026.
The problem with ancient core banking systems goes way beyond customer expectations. 55% of banks cite limitations in their existing core system as the biggest roadblock to achieving business goals. Think this doesn’t affect you personally? Well, 93% of banking decision-makers believe their future success depends on selecting the right core banking solution.
If you’re wondering whether it’s time to modernise your core banking system, want to know why modern cloud-native platforms outperform legacy systems, or are trying to remember what a core banking system even is, then this article is for you.
What is a core banking system?
A core banking system is the centralised software platform that manages a bank’s most critical daily operations and transactions. It is the backbone or hub connecting all branches and channels of a bank, ensuring that customers can access their accounts and perform transactions across ATMs, mobile apps, or in-branch, all in real time. Core banking systems handle a wide range of functions, including the following.
Customer account management
Maintaining records for savings, checking/current accounts, loans, credit cards, and other accounts.
Transactions and payments
Processing deposits, withdrawals, fund transfers, bill payments, and remittances across the bank’s network.
Interest and fee calculations
Automatically calculating interest accruals on deposits or loans and applying fees.
Loan processing
Managing the loan lifecycle from origination and credit scoring to disbursement and repayments.
Compliance and reporting
Consolidating financial data for regulatory reports and ensuring transactions meet regulations.
The core banking system is essentially the engine that ensures all of a bank’s products and services run smoothly.
Legacy systems vs. modern cloud-native core banking systems
Not all core banking systems are made equal. Some are up to 40 years old and running on outdated programming languages. These legacy systems tend to be monolithic and were often built before mobile or digital banking were even a consideration. Over decades, they often accumulated custom code and patches, resulting in architectures that are difficult to change. Common pain points with legacy cores include: limited or no APIs (hindering integrations), nightly batch processing instead of real-time updates, siloed data, and high maintenance costs for aging hardware and software.
By contrast, modern core banking systems are built with today’s technology and business needs in mind. They are usually cloud-native and API-first solutions. Instead of a single giant program, modern cores use an open, modular architecture where components are decoupled and can run independently (often as microservices) across distributed cloud infrastructure. Banks can mix and match modules or integrate third-party fintech services easily via open APIs, something that was nearly impossible with older monolithic cores. Modern cores also process transactions in real time, enabling up-to-the-second account updates and eliminating the downtime that old batch-processing systems require.
Importantly, modern core platforms are built to be integration-friendly and agile. They readily connect with digital channels, payment gateways, and fintech apps, allowing banks to offer new services (like e-wallets, mobile lending, or open banking features) much faster.
Implementation speed and ease also hold drastic differences; replacing a legacy core used to be a multi-year project, but new cloud-native cores can be deployed in months or even weeks. For example, one of our clients was able to implement a core in just three months.
Why you need a modern core banking system
Upgrading to a modern, cloud-native core banking system delivers a host of business benefits. Here are some of the reasons you need a modern core banking system:
Scale without barriers
Cloud cores scale elastically as customer volumes grow. Unlike on-premise systems weighed down by servers and maintenance, a cloud platform expands instantly. In fact, one Oradian client now runs over 15 million active accounts; growth that would have been impossible on legacy infrastructure.
Faster product launches
On a modern core, products that once took months to configure can launch in weeks. With a modern core, Esquire Financing in the Philippines went live in just 3 months, cut loan approvals from days to hours, and tripled its portfolio in under 2.5 years.
Lower costs, higher efficiency
The cloud makes it possible to replace unpredictable IT spend with usage-based pricing and automatic updates, with institutions like Esquire going fully paperless, and slashing overheads while serving more clients with the same headcount.
Reliable infrastructure built to grow
Legacy cores often require downtime and batch processing. Cloud-native platforms, on the other hand, are designed and built for resilience (Oradian delivers 99.9% uptime) so services stay live 24/7 across regions and time zones.
Experiences customers will love
Real-time data, faster services, and seamless channels mean customers see balances instantly, get loans approved in minutes, and enjoy 24/7 access.
Built in compliance and security
Modern cores come with encryption, audit logs, and role-based access as a standard. They update continuously to meet new rules, making audits and reporting easier and more accurate.
What to look for in a core banking system
When evaluating core banking software options, financial institutions should focus on a few features that distinguish a truly modern, future-proof core from a merely incremental upgrade. Here are the key features to look for:
Cloud-native, modular architecture
You should try to ensure the system is built for the cloud and isn’t just an old system hosted on cloud servers. A cloud-native core is optimised for scalability, resilience, and frequent updates. It should have a modular design (using microservices or component-based architecture) so that you can add or modify functionality without overhauling the entire system.
Modularity also allows a plug-and-play approach: meaning you can integrate the best third-party solutions or turn on new modules as needed, instead of being locked into one inflexible suite. Finding a solution (like Oradian) that was born in the cloud and built with modern development practices will ensure you’re powered with tools that can quickly adapt to your needs over time.
Open APIs and easy integration
Modern core banking systems are API-ready and integration-friendly. Open APIs allow the core to seamlessly connect with other software, so you can connect freely to payment gateways, mobile apps, fintech partners, credit bureaus, and more. This is essential for providing services like e-wallet top-ups, fintech collaborations, or multi-channel banking.
Make sure the vendor you’re surveying offers a robust set of APIs and perhaps an API developer portal or sandbox for your tech team. Integration should be straightforward, using standard protocols (REST/JSON APIs, etc.), so that your bank can quickly plug into the wider financial ecosystem.
In your local market, this could mean your core banking system easily links with local interbank networks, popular e-commerce platforms, or regional payment systems. An API-first core also future-proofs your bank for open banking trends, where sharing data with authorised third-parties can unlock new revenue streams.
Uptime guarantees
Uptime reliability should be a non-negotiable feature. Look for concrete figures, for instance, we’ve enabled our client FairMoney, a leading digital bank in Nigeria, to achieve a 99.9% uptime.
Ask your chosen vendor about their system’s architecture for high availability. Here are some possible questions to highlight in this area:
- Does it have redundancy across data centres?
- Is there an automatic failover if one component fails?
- How are upgrades deployed and can they happen without taking the system offline?
When evaluating solutions, scrutinize the vendor’s SLA for uptime and see if they have a track record of meeting it (e.g. references or case studies proving high uptime performance).
Regulatory compliance support
Banking in any region requires adherence to local and national regulations. Therefore, a core banking system should come with strong compliance reporting capabilities and the flexibility to configure to local regulatory rules. Built-in compliance features (for example, automated report generation, or limits that ensure lending or capital ratios stay within required bounds) will save your teams countless hours.
Additionally, security should be embedded at every level: data encryption (in transit and at rest), role-based access control, audit logs, and regular security updates.
When searching for a new core, ask how the solution handles updates for new regulations. Ideally, you want a partner that will keep you ahead of the compliance curve.
Core banking systems in action
Modernising your core unlocks fast growth, and across emerging and established markets alike, financial institutions are already providing what is possible with a cloud-native core. Here are some examples of what your peers have achieved.
Esquire Financing
Before Oradian, Esquire’s loan approvals could take weeks, with paper-heavy workflows slowing down both staff and customers. Within just three months of going live on Oradian, loan approvals dropped down to hours. Esquire have since tripled their loan portfolio in under 2.5 years, gone fully paperless, and are now seeking a billion-dollar valuation.
FairMoney
FairMoney started with an in-house system that simply couldn’t scale as their customer demand grew. After migrating to Oradian, they gained a core built to scale, enabling them to process millions of daily transactions with a 99.9% uptime. That resilience enabled FairMoney to expand into new products and markets while ensuring their customers always have access to reliable digital banking.
👉 Want to find out more? Here’s their story.
Salmon
When Salmon launched in the Philippines, it needed a core that could support fast market entry as well as long-term growth. With Oradian, Salmon went live in just six months, built custom workflows using Oradian Custom Code, and scaled from a single partner bank to nationwide operations. Within just two months of launch, 90% of customers were already using Salmon’s mobile app.
👉 Find out more about Salmon here.
Why you should choose Oradian as your core banking system
Oradian is API-first, modular, and designed for scalability, with a strong track record of successful deployments in Southeast Asia, Africa, Europe and beyond. Oradian brings both regional expertise as well as worldwide experience to financial institutions in high-growth markets, positioning us perfectly to help banks and financial institutions transform their operations.
We don’t just focus on technology, we deliver a true partnership approach to all clients. With us, you get a cloud-native core built for agility from day one. That means no heavy IT infrastructure, no costly upgrades, and no waiting months for simple product changes. Instead, you can configure new products in minutes and connect to payment providers easily through open APIs.
With Oradian, you can truly grow.
It’s time to modernise your core
Legacy core systems are aging, inflexible, and hard to integrate. They are a dead weight that can prevent your organisation from responding to the modern needs of your local market, where consumers expect quick, convenient, and innovative banking services.
It’s time to modernise your core with a cloud-native core banking system that provides the foundation you need to thrive in this environment: the scalability to onboard millions of new customers, the agility to roll out products in weeks, the efficiency of lower costs and automated processes, and the reliability of near 100% uptime and robust security.
Embarking on your core banking transformation may seem daunting, but with the right partner and platform it can be achieved quickly, easily, and successfully. The payoff is a banking operation that is truly future-proof, ready to connect with fintech ecosystems, support new digital channels, and scale into new markets or segments.
If your goal is to drive financial inclusion, launch digital banking services, or simply outpace competitors in service quality, then upgrading to a modern core banking system is the catalyst to get you there.
Start your modern core banking system journey by booking a call with Oradian.
