Check your banking system’s not rotten to the core

April 21, 2023 by Ian King

How test management streamlines development / Luxoft blog


Core (Centralized Online Real-time Exchange) banking is a back-end solution. 

It maintains the flow of information and activities like transactions, account opening/updates, customer onboarding, loan/debt management, etc., right across your organization. The core solution also enables customers to access their accounts from any branch, and branches to access applications from a single server (centralized data centers). 

Modern cloud-based, core banking systems talk to internal/external systems via open API-based architecture. And user-friendly software app-based platforms have made the systems more efficient to the point cloud banking is now a central tenet of banking transformation strategies. 

In fact, the growing popularity of cloud migration, fintech investment and managing customer accounts from a single server was reflected in a recent core banking software survey. From $12.51 billion in 2022 (up from $10.80 billion the previous year), the global core banking software market value is expected to more than triple ($40.67 billion, CAGR 18.3%) by 2029. 


Ahead in the clouds


Clearly, the cost-effectiveness of a mix of private- and public-cloud working, with its extra flexibility, security, scalability and collaborative potential, overshadows traditional thinking around the joys of on-premise technology. 

All over the world, banks spend millions of dollars each year on maintaining core banking systems that interface with tens or hundreds of other systems in a frantic, complex techno-dance. Core systems handle an exceptionally high volume of transactions and are expected to carry on without a break of any sort, because prolonged outages invite regulatory scrutiny (fines and reputational risk), customer dissatisfaction and significant loss of revenue on top of the reputational risk. 

Luxoft’s core banking system health check uncovers new opportunities to improve efficiency, mitigate risk and strengthen resilience. 

Upgrading legacy systems can be daunting


The journey to a digitally connected system requires a cool hand and steady nerves, especially for banks with COBOL-based systems. Upgrading patched systems is costly and extremely complicated. And, in today’s contactless business world, onsite support can be a challenge too. 

Legacy systems rarely satisfy customer preferences for real-time capabilities. Legacy core banking systems are batch based, so tasks are completed at predetermined intervals, and banks manually control the individual processes. 

Fending off cyberattacks on a vault of sensitive banking data is a massive challenge. Increased mobile and cloud use has escalated the battlefront, particularly for small and mid-sized banks with insufficient resources to mount a belt-and-braces defense. 


Run a Temenos core banking system health check 

The object of the health check exercise is to fine-tune your existing platform. It's not about insisting that “your platform architecture is way out of date, so you need to implement this other core banking solution now.” That’s out of scope (you’d need an architecture review for that). 

Luxoft’s Temenos health check recognizes you already have a robust, modern solution. So, we identify operational constraints, bottlenecks and other adverse issues, suggesting practical fixes to elevate your core banking system to the same contemporary standards as your newer competitors. 

But don’t expect root and branch recommendations. Enriching platform capability is more about evolution than revolution. 

Improve a patchy performance


We’ll look to move your organization back to core — away from the piecemeal enhancements added over time — and establish an extensibility framework to bring you up to speed with the latest Temenos configurations. Returning to the core architecture will help you achieve the desired performance improvements. The process removes old configurations, now part of the base product. 

The audit scope includes integration and architectural design; infrastructure; local development optimization; business process simplification/improvement; and implementation strategy, tactics and prioritizations. 


Doing the business


The Temenos core banking system health check analyzes pain points in three major enterprise and IT segments, proposing down-to-earth ways to boost performance: 


  • Decrease time to market for new products 
  • Ensure timely compliance with regulatory requirements 
  • Generate more cross-selling opportunities 
  • Increase innovation in product development and pricing 
  • Achieve a consistent multichannel experience 


    • Optimize existing costs associated with application support 
    • Reduce rising maintenance costs for legacy IT systems 
    • Stabilize and align stand-alone apps 
    • Enable multichannel capability 


      • Streamline end-to-end business processes 
      • Expand interoperability by standardizing business processes 
      • Replace manual with automated operations 
      • Outsource non-core operations 

      Our core banking system audit checklist helps financial institutions mitigate risks and improve operational efficiency. We show you how to standardize processes, introducing straight-through processing (STP) and intelligent automation to replace error-strewn manual operations, and providing a high-level road map and ROM budget. 

      Once the health check report has been shared and agreed, we ensure team readiness for deploying the recommendations, resolving the most pressing road-map issues first. Post-implementation, Luxoft works with you to measure results and business impact via a timely, in-depth review process. 

      Why partner with Luxoft?


      • Deep knowledge of Temenos’ capabilities 
      • Thought leadership around Temenos products (e.g., Transact) and peripherals based on the successful execution of numerous core banking solutions 
      • Alignment of prime investments and allied innovation driven by Temenos core banking system software 
      • Differentiated services, including hosting, consultation and implementation 
      • Trusted partner, liaising with different teams to complete an insightful health check of the core banking systems 
      • Temenos experts ready for worldwide project assignments 
      • Increased visibility and transparency of the Temenos core banking system. We provide a team of independent analysts offering an unbiased assessment of the bank’s existing architecture 

      How can you check if your Temenos banking system is rotten to the core? 

      Find out how healthy your core banking system is (and could be) by running a Temenos core banking system health check. Visit our website, or contact us to arrange a chat or a personalized demonstration. 


      For more Banking and Capital Markets insights, see Luxoft on LinkedIn

        Ian King , Temenos Practice Director, Banking and Capital Markets, Luxoft

      Ian King

      Temenos Practice Director, Banking and Capital Markets, Luxoft

      Ian leads the Temenos Practice within Luxoft. He brings over 30 years’ experience in many roles within banking and capital markets, having worked at several large financial institutions before moving into consulting. Ian has operated in all aspects of the technology business, from infrastructure, application support and development, plus project and program management, to leading a Temenos capability of over 240 people. He is looking to grow our capabilities and bring exceptional value to all Luxoft clients.

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