Core Banking Systems and Options for Modernization

Alcazar, Julian; Baird, Sam; Cronenweth, Emma; Hayashi, Fumiko; Isaacson, Ken

Briefing

Core Banking Systems and Options for Modernization

Abstract: Each U.S. depository institution (DI)—including banks and credit unions—uses a back-end information technology system to process daily transactions and manage financial accounts. Many of these “core banking systems” are outdated and unable to fully accommodate modern services, such as open banking and instant payments. Modernizing these systems is a complex process, and DIs may consider a full replacement, a component-based replacement, or augmenting their existing system.

Keywords: banking system; updating; instant payments;