Next-gen corebanks software

Next-gen corebanks provider have refragmented the CBS landscape with creation of new market segments

The emergence of next-gen providers has reversed that trend driving fragmentation of deal volume and emergence of more targeted and diverse propositions. Celent has identified key next- gen types:

• Product cores - often targeting larger institutions, these provide focused product functionality, typically covering product ledger, product management, although often supported by payment engines.
• Broad cores - supporting digital direct banks, providing product capabilities, digital onboarding, and card payments as well as enablement for digital banking.
• BaaS platforms - multi-tenant cores specifically targeting banks providing banking services through other institutions (Note that specific BaaS providers are not covered in this report, although many next-gen cores do support this market.)

BROAD CORES

Wide platform functionality supporting digital processes and products, especially neobanks, digital direct banks, and payment or electronic money institutions, with card issuing, digital onboarding and product processing (often stronger on deposits).

PRODUCT CORES

High performance product ledgers with advanced product creation and management, designed to support the complex products and top-end performance requirements of top-tier institutions, and work alongside wider enterprise architectures.

NEXT-GEN CORE FUNCTIONAL ARCHITECTURE MAPPING

Diagram shows a stylized enterprise architecture mapping of key functionality areas that support a bank across front to back office.

These have been mapped to indicate typical functionality provided by the two main types of next-gen core platforms: product cores and broad cores. While individual platforms do not necessarily fit completely or neatly into these categories, most providers have a primary functionality focus that aligns to one of these groupings. Note: broad cores also typically provide product core capabilities, i.e. their total functionality coverage is a combination of broad core and product core mapping. Roadmap coding shows where the respective type of next-gen vendors are typically prioritizing their functional R&D investment, although many have some capabilities in these functional areas already.

Additional modules indicates where vendors often provide functionality, but this is typically provided either as an add-on to the primary core platform, or pre- integrated with ecosystem partners. Again, it should be noted that some platforms have these areas as part of the primary platform offering.

Non-core functions are typically not provided as part of next-gen platforms but will integrate into them. While they may be provided through defined ecosystem partners in some cases, generally these will be systems directly obtained by institution rather than the vendor

Author

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