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Modernization in Motion: How leading Core Banking Players are Embracing Open Banking

Core banking software serves as a centralized record-keeping system, empowering financial institutions to manage essential banking processes such as customer account management and payment transactions. As technology continuously evolves, so too do core banking solutions, progressing from isolated branch-based systems to the era of Banking as a Service. In this dynamic landscape, discussions around microservices, composable banking, and open banking have become paramount for staying relevant.


Navigating the Open Banking Landscape:

In the past decade, Open Banking has emerged as a pivotal movement, fostering a loosely coupled ecosystem where all stakeholders can securely and seamlessly share financial data. This collaborative approach enhances the end-user experience, providing tools for better financial management, fast and secure payments, fraud prevention, and streamlined access to credit and loans.


Exploring Key Players:

In the realm of Open Banking, FinTechs and third-party providers have exhibited exceptional agility, often leveraging cloud-native solutions. This prompts us to explore how traditional players, particularly some of the popular names in the Core Banking market, are modernizing their systems to align with the demands of Open Banking.


Through our work with financial institutions, we often also work with their core banking system providers to implement open banking connectivity and use cases. In this article, we’ll share our take on the major players in the core banking market and their response to the Open Banking paradigm. This includes Temenos, Finacle by EdgeVerve (an Infosys Subsidiary), Oracle's FlexCube, TCS Bancs, Jack Henry, Fiserv, Sopra and Finastra in no particular order.


1. Temenos:

Temenos, a Swiss-based banking software specialist, stands out as a leader in Core Banking for Retail, Wealth, SME, and Corporate segments. Committed to innovation, Temenos allocates 20% of its revenue to Research and Development. Noteworthy modernization initiatives include LEAP, offering a fast, low-risk transition to a modern cloud-native architecture. Temenos Banking Cloud which was launched in the beginning of the year, has over 120 pre-packaged banking products, predefined customer journeys, and over 700 pre-configured APIs which facilitate the deployment of software solutions in 24 hours, significantly reducing modernization costs. Temenos' Transact, a core banking suite, supports open banking through APIs for third-party integration, aligning with regulations such as PSD2, Berlin Group API Guideline, UK Open Banking, and Australian CDR.  Temenos is also a BaaS enabler; it provides the technology and infrastructure that allows companies like Green Dot and Mbanq to offer a wide range of banking services to their customers.


2. Finacle - EdgeVerve (An Infosys Subsidiary):

EdgeVerve's Finacle is another leading Core Banking solution, recognized 14 times in a row by Gartner Inc. for its Global Retail Core Banking. The Finacle suite champions modernization through flexible product factories, extensive parameterization, and open APIs. The Finacle Online Banking Solution, a cloud-native internet banking solution, further accelerates digital transformation. The suite's API-first approach includes an API Hub and API Management tools, fostering collaboration with third-party developers. While the website doesn't explicitly state which open banking standards the platform supports, Finacle positions itself as an enabler of open banking through its comprehensive API offerings.


3. FlexCube - Oracle:

Oracle FlexCube, a comprehensive modular banking solution, has adapted to the evolving landscape. In 2020, Oracle was named as a Leader in the Gartner Magic Quadrant for Global Retail Core Banking for the 12th time. In its modernization journey, Oracle introduced a blockchain-based adapter, facilitating seamless data exchange. The platform's integrated library of RESTful services industrializes API consumption, adhering to standards like PSD2 and the UK's Open Banking. Oracle offers a SaaS-based API solution with over 1,800 deployable APIs, aligning with Berlin Group standards. FlexCube's open banking capabilities encompass Account Aggregation, Consent, TPP Management, Authenticity, and Security among others.


4. Jack Henry & Associates:

Jack Henry & Associates, a prominent technology solutions provider, has embraced open banking through platform integration and API solutions. Recognized in IDC's 2023 FinTech rankings, Jack Henry ensures secure access to the open banking ecosystem. It was the first Core Provider to join Akoya in 2021, which enables its customers of banks and credit unions using its Banno Digital Platform the ability to grant fintech apps access to their financial data.  The company's Digital Toolkit enables seamless integration with third-party fintech solutions, emphasizing security while phasing out screen scraping. Financial institutions benefit from direct access to open APIs, design frameworks, and authentication tools, providing flexibility to build or integrate solutions on their terms. Jack Henry has also been involved in providing Banking as a Service (BaaS) capabilities to its clients. Treasury Prime, a leading BaaS company, has announced its acceptance into the Jack Henry Vendor Integration Program, which allows all banks on the Jack Henry core to adopt Treasury Prime's BaaS technology and immediately offer embedded finance services


5. BaNCS by TCS:

TCS BaNCS, developed by Tata Consultancy Services, spans services in Banking, Capital Markets, and Insurance. The TCS BaNCS Marketplace offers a rich catalog of solutions and APIs, facilitating collaboration among financial institutions and solution partners. In partnership with AWS, TCS enables open banking through secure APIs, aligning with evolving market needs. The AWSBU Security Foundation Designer Solution ensures a centralized point of control for security, adhering to open banking principles. Volt, Australia's first neobank, has partnered with TCS to power Volt 2.0, its next-generation BaaS platform, leveraging TCS BaNCS for Payments to expand its offerings and deliver a superior customer experience.


6. Fiserv:

Fiserv, a global financial services technology provider, boasts a scalable and modern core banking platform. Recognized as a "best-in-class" provider by Aite Group, Fiserv has made strides in open banking through API-enabled integration tools. The Data Aggregation Solution Set provides actionable insights, while the Developer Studio and AppMarket offer collaboration opportunities between financial institutions and fintechs. Fiserv has collaborated with Central Payments to deliver modern issuing capabilities, bringing together a BaaS platform, products, and services, along with access to a network of sponsor banks to support a wide range of payment products


7. Sopra

Sopra Banking Software (SBS) is another leader in core banking solutions, serving over 1,500 clients in 80+ countries. Offering both on-premise and cloud-based deployment, including Software-as-a-Service (SaaS) models, SBS provides banks with enhanced control and scalability. With a robust catalog of 400+ APIs, SBS excels in open banking capabilities, enabling Third-Party Providers (TPPs) to connect with over 3400 financial institutions. Noteworthy capabilities encompass compliance with industry standards, customer data aggregation, control of information access, and the provision of composable, hyper-personalized experiences. Key open banking use cases with SBS include improving credit insights through enhanced scoring algorithms and facilitating faster, cost-effective remittance transfers.The company's BaaS platform offers a modern tech stack, new business verticals, agile entry, reduced costs, and automated services, allowing for a quick, inexpensive, and efficient entry into banking operations


8. Finastra

Finastra, formed through the merger of Misys and D+H in 2017, the London-based fintech company operates globally with a core banking solution known as Fusion Phoenix. Finastra's innovation is evident in FusionFabric.cloud, recognized as the world's first open innovation platform for the financial services ecosystem. While API compliance specifics are not explicitly stated on the website, Finastra's extensive product portfolio caters to diverse lines of business, including Corporate and Commercial Banking, Digital & Retail Banking, Investment Management, Lending, Payments, Treasury, and Capital Markets while addressing various business needs such as Lending, Financial Well-being, KYC, Authentication, Billpay, Trading Chatbots and Advisory.


In September 2022, Finastra and Visa announced a Banking as a Service (BaaS) collaboration to offer cross-border payments for businesses and individuals through Finastra's Payments Hub and Visa Direct2, enabling access to billions of accounts worldwide. The new capability will give Finastra’s bank customers around the world access to cross-border payouts capabilities for small- and medium-sized businesses, and individuals, in multiple currencies and countries.


Conclusion

In the landscape of core banking, the adoption of open banking principles is no longer an optionality, but a strategic necessity. As the industry continues to progress, maintaining a deep understanding of the latest developments undertaken by key players, including their exploration of new service models like Banking-as-a-Service (BaaS), is critical for financial institutions to remain competitive, adapt and innovate.


Ready to Elevate Your Open Banking Journey? Connect with Altitude Consulting!


Altitude Consulting is driving the open banking revolution. We are a team of open banking experts, who are passionate about financial technology and have unparalleled expertise in management consulting, strategy, product, and technical leadership.


Whether you're a financial institution seeking to optimize your open banking capabilities or a technology provider aiming to stay at the forefront of innovation, Altitude Consulting is your strategic partner.


Take the Next Step:


Explore: Dive deeper into the world of open banking with Altitude Consulting.

Consult: Tap into our team's expertise for tailored insights and solutions.

Innovate: Transform your approach to open banking and stay ahead of the curve.

Altitude Consulting is here to elevate your open banking journey. Let's navigate the future of finance together. Contact us today!

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