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Assessment report for DFI- MMP Course

By Muluken Alemu

Core Banking System: what is it?

The financial sector is undergoing technological changes that offer great potential for improvement. Therefore, it’s not surprising that Core Banking is now at the heart of financial institutions’ digital transformation. An overview of the Core Banking System is necessary to understand this phenomenon!

What is a Core Banking System?

Core Banking System: Definition

Core Banking is the computer system (software) used to process and manage bank and financial institutions’ operations. It includes different modules: account management, payments, loans, accounting, onboarding (KYC/KYB), and anti-money laundering (AML-CFT).

Today, there are different types of core banking. Among them is the Core Banking System. The term “system” refers to the legacy. In other words, a Core Banking System is a Core Banking technology solution inherited from the 1980s-1990s.

Core Banking System: Architecture

Traditional Core Banking Systems are mainly built on a monolithic architecture, i.e., they’re made up of a single autonomous and independent technological block based on a single code base. The evolution of this type of software is, therefore, particularly complex, costly and time-consuming: it requires updating the entire technology.

Moreover, most of the monolithic architecture components are developed in COBOL. Created in 1959, this computer language is still widely used in critical infrastructures, such as banks and financial institutions, even though fewer and fewer developers master it.

Core Banking System: Infrastructure

Most traditional Core Banking Systems have an on-premises infrastructure, i.e., hosted on a mainframe. This infrastructure requires the solution installed on the institution’s servers, which takes care of maintenance, updates, backup, security, and system renewal. It thus generates significant maintenance costs and is difficult to upgrade.

Core Banking System: an outdated model?

Core Banking System: the legacy’s limits

Because of its architecture and infrastructure, the Core Banking System hinders financial institutions’ service scalability. Monolithic technologies are stable (for the most part) but inflexible and slow to evolve. This makes it difficult for financial institutions to comply with new regulations or develop new products/services and enhance the customer experience. The products designed on Core Banking Systems are mature and generic but difficult to customize to meet new use cases.

Core banking systems also lack performance in data storage and exploitation. In addition, legacy systems have strong business logic and store data in silos. These characteristics make it challenging to create interrelationships between customers and products and result in duplicate data within the system.

In short, although it allows financial institutions to process their historical activities satisfactorily, the Core Banking System is now proving unsuitable because it cannot claim the scalability that the current context requires. With the legacy system, it’s impossible to meet new customer expectations (fluidity, personalization, innovation, etc.) and demands from regulators (monitoring and production of real-time information, among others). It’s also challenging to keep up with the competition and catch up with FinTech introducing new practices, standards, and business models.

Many financial institutions are aware of the need to modernize their systems. However, several factors have prevented them from taking the plunge. Cost, delays, service disruption, technical migration issues... In this context, banks and financial institutions often prefer to stick with their legacy platform to execute daily operations. But today, technological innovations are shuffling the deck.

Core Banking Platform: new opportunities

Since the 1980s-1990s, a lot has changed! A new type of core banking has appeared in the financial ecosystem: the Core Banking Platform.

Core Banking Platforms are designed to be modular, which means that transaction management functions are independent of banking services such as account creation, loan management, deposit and withdrawal management, and other management activities. This modular architecture enables localized changes that are faster and easier to test and launch. It also improves settings and scalability by providing additional services to financial institutions using API.

The Core Banking Platform’s orchestrator approach also enables new modern digital capabilities to grow and avoids the restrictions of Core Banking Systems. This new approach accelerates the transition and reduces risks. The Core Banking Platform’s real-time data hub and routing layer are based on an event-driven architecture (EDA). This makes intelligent data transaction routing and choreographing API management easier while preserving data from core banking systems and ensuring its integrity. This provides the development of modern digital experiences and innovative applications in all areas: retail banking, payment cards, loans, and credits...

How to choose your Core Banking Platform?

Core Banking System: how to replace it?

When planning technological investments, many financial institutions focus on developing front ends such as their website, mobile application, and multi-channel. While this has allowed them to extend the life of their core banking system, it’s not a long-term solution.

The Core Banking System modernization, including the integration of a Core Banking Platform, must now be reconsidered. And this is all the more obvious as the costs of running and maintaining Core Banking Systems are increasingly important, sometimes even equivalent to implementing a new Core Banking Platform. The next logical development step is to migrate to a Core Banking Platform, which will provide speed, agility, and scalability.

However, any migration involving a large-scale project is costly and time-consuming. To meet this challenge, financial institutions need to take a strategic and technical approach by hollowing out their existing Core Banking System while testing multiple Core Banking Platforms on parts of their product portfolio. This process can be tricky, and the ROI is difficult to measure, but it’s undoubtedly the best option.


Core Banking System Vendor For Ethiopian Banks 

Core Banking System Vendor For Ethiopian Banks


Name of Financial Institutions

Core Banking System (Name of Vendor)


Awash International Bank

Fusion Banking Essence (FBE)


Commercial Bank of Eth.

Temenos T-24


Development Bank of Eth.

Temenos T-24


Dashen Bank

Oracle Flex Cube


Wegagen Bank

Oracle Flex Cube


Bank of Abyssinia

Temenos T-24 (Infinity)


Hibret Bank

Flexcube and Oracle Banking Digital Experience (OBDX)


NIB International Bank

Temenos T-24


Cooperative Bank of Oromia

Temenos T-24


Lion International Bank

Sopra Banking Software


Zemen Bank

Oracle Flexcube & CR2 Digital Banking Platform


Oromia Bank

Sopra Banking Software


Bunna International Bank

Finacle of Infosys


Berhan International Bank

Neptune Rubikon


Abay Bank

Oracle Flexcube


Addis International Bank

Omni Enterprise


Debub Global Bank

Oracle Flexcube


Enat Bank

Oracle Flexcube


ZamZam Bank

Oracle Flexcube


Goh Betoch Bank

Temenos T-24


Hijira Bank

Path Solutions’ iMAL platform of Path Solutions


Siinqee Bank

Oracle Flexcube


Shabelle Bank


Ahadu Bank

Intel Solutions


Tsedey Bank

Oracle Flexcube


Amhara Bank

Temenos T-24


Gadaa Bank


Sidama Bank

Craft Silicon


Rammis Bank

Path Solutions’ iMAL platform of Path Solutions


Omo Bank

Oracle Flexcube


Tsehay Bank

Oracle Flexcube



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