What are Core Banking Systems?

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Core banking systems serve as the central repository of account and general ledger information for financial institutions. Many cores also provide a platform to power online banking and ATMs.

Core Banking Systems’ Account Information

A bank’s core system stores account-related data, including:

  • Account numbers
  • Customer information
  • Balances
  • Monthly payment due dates (for loans)

Additionally, a core system performs transactional functions, such as computing accrued interest on CDs and savings accounts, calculating interest earnings on loans, determining new loan payments based on escrow overages/shortages, and updating interest rates tied to indexes.

Departments Using the Core Banking System

Most employees at a financial institution depend on the core banking system in some way. Employees handling new accounts enter customer data and generate signature cards through the bank’s core system. Teller modules for check cashing and deposits update the core system. Loan officers rely on information from the core to answer questions about amounts owed, past-dues, and collateral.

Generally, a financial institution’s core banking system integrates with the bank’s accounting system, which makes it easier for back-office users to calculate figures (daily deposits, assets, liabilities, total outstanding loan amounts) and accounting staff to balance the general ledger. 

Automated Functions

A financial institution also relies on its core system to increase efficiency through automated features, such as:

  • Payment notices
  • Rate change notices
  • Past-due notices
  • Cure letters
  • Checking statements
  • Internal reports

Third-Party Integrations

Core banking systems typically offer a variety of add-on modules, such as document imaging and exception tracking. Native add-ons are convenient and sometimes included in the bank’s total contract with the core provider. However, some core-provided add-on modules lack the functionality that growing banks require.

That’s why third-party software developers, such as AccuSystems, exist to create core-integrated products that offer enhanced functionality. Examples of third-party applications include: document imaging products, loan exception tracking tools, e-sign modules, reporting engines, and portfolio analyzers.

Core Banking System Integration Resources

Looking for more information about AccuSystems’ core-integrated products to increase your financial institution’s efficiency? Check out AccuAccount for loan account management and AccuDoc for bank-wide imaging. Download our integrations PDF for a list of available core integrations.

Browse our banking definitions page for more terminology.

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