We’re living in an era where technology is constantly reshaping the traditional idea of how we process and handle money.
Off the back of increasingly sophisticated automation and financial technologies, core banking is emerging at the forefront of this financial revolution.
As recently as 2022, the global market for core banking software hit an impressive 10.89 billion USD, and there’s no immediate sign the trend is slowing.
Experts predict a growth phase of 9.3% annually through 2030, and the USA, China, and Asian Pacific regions are leading the charge.
These stats are a clear sign of how crucial core banking has become in the day-to-day financial dealings with our banking institutions.
So, what is core banking exactly? Think of it as the powerhouse behind your bank’s operations.
It is the back-end system that seamlessly connects different branches of a single bank, making facets such as loans and credit processing smoother and faster not just for the bank but for customers too. Read on to find out more.
What is Core Banking?
The term “core” is an acronym for 'Centralized Online Real-Time Environment’, and represents both the physical and topological structure of core banking. It enables a bank to operate from both the perspective of the instrument itself and its customers as a single entity.
Customers are provided with consistent and efficient services, regardless of where they live, their country, or even the presence of local bank branches. The core banking system is central to modern online banking, streamlining account management, loans, and transaction processes.
Customers who interact with a core banking system can expect more convenience and independence. Actions such as withdrawals and deposits are processed centrally by back-end servers, which can either be hosted on-premises or cloud-based.
The servers handle everything from transaction processing to authentication, which ensures speed and security. The centralized servers are robustly protected against cyber threats, safeguarding customer and bank data.
Types of Core Banking Systems
Generally, core banking platforms are divided into two types:
Traditional
Digital-first
Traditional systems operate on the basic aspects of banking—the foundational services and processes one would expect from a “traditional bank.”
Digital-first core banking, on the other hand, is at the forefront of financial technology (fintech). They leverage innovations such as automation, AI, and blockchain, offering advanced functionality and technologies to their customers.
Core Features of IT Core Banking
Typically there are several (information technology) IT features present in banking institutions that have adopted the core banking structure. Each key feature plays a role in shaping how the bank operates and interacts with its customers.
Real-Time Transaction Processing
Transaction processing done in real-time is a hallmark feature of IT banking. It ensures that financial activity conducted within the system, like deposits or transfers, are processed and updated instantly.
This kind of fast payment system is essential for not only customer satisfaction but also the accurate management of banking records.
Unified Customer Data Management
Unified management of customer data is a vital component of core banking. Systems bring together information from various touchpoints to create a complete customer profile.
The integrated approach facilitates the rapid delivery of personalized services and enhances risk management strategies.
Multi-Channel Support
Customers who interact with core banking services will often experience multi-channel support. This enables the customer to engage with their bank through a myriad of different mediums – mobile apps, websites, or in-person visits. This ensures a seamless and consistent banking experience.
The multi-channel support is particularly important with digital-first core banking systems, where a brick-and-mortar branch is not available.
Automation and Scalability
Automation in core banking software plays a key role in optimizing routine tasks. It reduces manual workload while simultaneously reducing the likelihood of errors.
Equally important is scalability, which allows banks to expand their offerings and accommodate growing customer bases without sacrificing performance or security.
Multi-Factor Authentication (MFA)
Cyber security is taken seriously within core banking, due largely to both the centralized and mobile of the system.
Multi-factor authentication adds an extra layer of protection and typically requires a customer to authenticate sessions and transactions with a one-time passcode or token.
For example, a customer transferring money from an account can expect to authenticate the transaction with a 4-digit code sent to a linked device such as a smartphone.
The feature is critical for safeguarding transactions and preventing unauthorized account access.
Know Your Customer (KYC) Onboarding
Finally, KYC onboarding is integral to IT core banking systems. KYC stands for ‘Know Your Customer” and ensures the bank thoroughly verifies the identity of new clients.
While traditional banks might have required a customer to bring physical identification such as a passport or residency papers, a core banking service can verify a customer with secure online submission of ID.
This process is streamlined in modern systems, enhancing efficiency while adhering to regulatory compliance.
The Transformative Benefits of Core Banking Solutions
Core banking solutions, pivotal in the modern financial landscape, offer an array of benefits that not only streamline banking operations but also revolutionize the customer experience.
From enhancing data security to boosting operational efficiency, these solutions are reshaping how banks function.
Enhanced Customer Experience
One of the most noticeable benefits of core banking systems is the enhanced customer experience.
These systems allow for more personalized and efficient service, offering customers quicker transaction processing, easier account access, and a range of convenient online services.
Improved Operational Efficiency
A core banking solution streamlines various banking processes, significantly improving operational efficiency. Automation of routine tasks reduces manual labor and minimizes errors, leading to a more efficient, cost-effective operation.
Enhanced Data Security
With the increasing prevalence of cyber threats, the enhanced data security provided by core banking systems is invaluable.
These systems employ sophisticated security measures to protect sensitive customer data, ensuring safe and secure banking transactions.
Regulatory Compliance and Risk Management
Core banking platforms are designed to comply with the ever-evolving regulatory landscape, which is crucial for banks to avoid penalties and legal issues.
These systems help in risk assessment and management, ensuring banks operate within the set regulatory frameworks.
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Case Study: NKGSB's Transformation with Core Banking
A prime example of the benefits of core banking solutions can be seen in the transformation of NKGSB, an Indian bank established in 1917.
The traditional bank undertook a 17-month process to overhaul its traditional banking infrastructure. This was in collaboration with Modus and the InfoSys Finacle platform, a niche core banking software provider, and Data Systems Group.
This transformation included the implementation of Automated Clearing House (NACH/ECS), Real Time Gross Settlement (RTGS) systems, National Electronic Fund Transfer (NEFT), and Mobile Banking. The outcomes were remarkable:
Unified Core Banking System: NKGSB moved to a single, integrated core banking system, enhancing coherence across its services.
Internalization of Processes: Previously outsourced processes were brought in-house, leading to better control and integration.
Automation and Information Capture: The automation of tasks and improved information capture significantly enhanced operational efficiency.
Easier Access to Customer Data: Retrieving customer information became more straightforward, aiding in better customer service.
Increased Readiness for Change: A core banking system means the bank is now better equipped to adapt to future technological advancements and market changes.
This case study of NKGSB not only highlights the multifaceted benefits of core banking rollouts but also demonstrates how traditional banks can successfully transition into the digital age, setting a precedent for others in the industry.
Challenges in Implementing Core Banking Solutions
While the transition to core banking solutions offers numerous benefits, it's not without its set of challenges. These hurdles can range from technical complexities to human factors, each requiring careful consideration and strategic planning.
Integration with Legacy Systems: Many banks operate on dated systems that might not seamlessly integrate with a modern core banking solution.
Data Migration and Cybersecurity Concerns: Shifting data from legacy systems to new core platforms involves significant risks. The process needs to be secure to protect sensitive financial information. Additionally, ensuring data integrity during migration is a critical challenge.
Staff Training and Change Management: The shift to a new system necessitates staff training. Employees must be brought up to speed with the new technologies and processes.
Cost Implications and ROI Analysis: Implementing a core banking platform often requires substantial investment. Banks need to conduct thorough cost-benefit analyses to ensure that the long-term return on investment (ROI) justifies the initial expenditure.
Pioneers in Core Banking: Fintech Success Stories
SDK Finance: As a veteran fintech software vendor with over 15 years of experience, SDK Finance has carved a niche in enabling various financial services like P2P lending, mobile banking, and e-wallets.
Skaleet: Next-generation platform, scalable and capable of continuous deployment. Skaleet specializes in services like card issuing and banking accounting, underpinned by robust KYC, KYB, and AML-CFT frameworks.
Fintech Lab’sofferings are comprehensive, including PSD2-compliance, SWIFT, neo-banking, and open banking APIs. Their solutions, which also cover e-wallets and currency exchanges, are popular across Europe and Asia.
The Future of Core Banking Platforms
As we peer into the future of banking, it's clear that the sector is on the cusp of a transformative era propelled by emerging technological trends.
These advancements promise to redefine the banking experience for both institutions and customers.
Let's explore the key trends shaping the future of banking.
Instant Real-Time Banking: The shift towards real-time banking is accelerating. This trend is about providing immediate transaction processing, account updates, and customer notifications, making banking more responsive and efficient.
Open Banking: Open banking is revolutionizing the industry by promoting greater financial transparency and data sharing between banks and third-party providers. This fosters a more interconnected and innovative banking ecosystem, offering customers more personalized financial services.
Artificial Intelligence (AI) and Machine Learning (ML): AI and ML are at the forefront of driving smarter, more predictive banking solutions. From personalized customer service to fraud detection, these technologies are enhancing the efficiency and security of banking operations.
Blockchain: Blockchain technology is gradually gaining traction for its potential to enhance security, transparency, and efficiency. Its application ranges from secure transactions to streamlined cross-border payments, presenting a new frontier in banking technology.
As these trends continue to evolve, expect core banking deployments to become more agile, secure, and customer-centric.
The Future of Banking with Intellectsoft
As we conclude our exploration of core banking, it's evident that this field is about redefining the banking experience.
From the integration of real-time processing and open banking to the innovative use of AI, ML, and blockchain, the core banking system is set to revolutionize the financial landscape.
At Intellectsoft, we stand at the forefront of this transformation. Our expertise in financial software development propels banking and financial services into the future. We specialize in crafting customized online banking platforms, and mobile apps with a focus on security and user-friendly UI/UX, and systems integration.
We have implemented cutting-edge solutions in blockchain and cryptocurrencies, digital wallets, and AI & ML technologies to redefine efficiency and customer service in banking.
Join us in this journey to architect new banking experiences and advance your business performance with Intellectsoft's future-proof solutions.
Embrace the change, and let's shape the future of banking together.
FAQ
What are the main benefits of implementing core banking solutions?
A core banking solution offers numerous benefits, including enhanced customer experience, improved operational efficiency, and strengthened data security. These systems ensure regulatory compliance and facilitate risk management.
How can Intellectsoft assist in the development of enterprise software for financial services?
Intellectsoft specializes in enterprise software development, offering tailored solutions that align with the unique needs of financial organizations. Our expertise in blockchain, AI, and digital wallets ensures cutting-edge, secure, and efficient financial services.
What role does product development play in enhancing fintech solutions?
Effective product development is crucial in fintech for introducing innovative features and functionalities. Intellectsoft excels in product development, creating solutions that cater to evolving market demands and customer needs, driving the fintech industry forward.
The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.
Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.
In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!
The Importance of Customer Satisfaction in the Hospitality Industry
Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.
Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.
Challenges in Hospitality
As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!
Poor Customer Service
Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:
Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls
These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.
Digital Transformation Gaps
Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems. Source: workstaff.app
While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.
Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).
When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.
If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.
Reskilling Staff
The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.
Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.
We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!
How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture
Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.
Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.
Examples of Intellectsoft projects
Property management systems (PMS)
We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.
Guest Experience Management App
Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.
Existing Customers First: Building Loyalty with Personalized Touchpoints
Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.
Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.
Personalization: How Technology Can Help?
Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.
More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.
Source: Deloitte
How does technology make it happen?
CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.
With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.
Our Case Study: Smart Hotel Management & Loyalty Program
For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.
Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.
Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:
"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."
Leveraging Software to Increase Upsell Opportunities
Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:
Dynamic Pricing Algorithms
For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.
Upselling via Apps
Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.
Inventory and Resource Management Software
Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.
Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.
Steps For Implementing a Customer Service Technology Solution
Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:
1. Understand Your Needs
Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.
2. Pick the Right Tools
Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.
3. Equip Your Team
Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.
4. Keep Improving
Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.
Some Tech Ideas for Hospitality Businesses
CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.
Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.
Conclusion
To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.
At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.
Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.
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