Bridging the Gaps: The Power of Core Integration for Bank Connectivity
Being able to deposit a check through your mobile banking app, transfer funds between accounts, and pay a bill—all within minutes—has become a standard part of everyday banking. Behind this seemingly simple customer experience lies a complex ecosystem that most people never see: the core banking system. In this tangle of interconnected systems, or “cores,” each is responsible for a different slice of the bank’s operations. If these cores can’t talk to each other seamlessly, chaos ensues—frustrated customers, regulatory headaches, and lost revenue.
How do banks, both large and small, ensure their systems work in harmony, creating seamless customer experiences? Join us as we sit down with Sindhura RaoVallurNatt, a Senior Developer at Axletree with over twelve years of experience in financial messaging and integration, to explore the evolving landscape of core integration. Together, we will explore new developments in bank connectivity, troubleshoot the challenges institutions face, and demonstrate how experts like Sindhura and the Axletree team empower financial institutions to navigate an increasingly dynamic banking landscape with confidence.
What Exactly is a Banking Core?
In today’s financial ecosystem, banks rely on a set of interconnected software platforms—commonly called “cores”—to handle everything from customer onboarding to loan management and payment processing. In essence, a banking core is the central nervous system that manages all critical banking operations: customer accounts, transactions, loans, credit cards, balances, payment processing, and relationships with other financial institutions.
Most financial organizations don’t build these systems from scratch. Instead, they purchase them from specialized providers. Large banks often customize their core in-house or use specialized software from top providers (such as Fiserv, Finastra, and more). Smaller or newer banks may rely on off-the-shelf, cloud-based solutions.
Fragmented Cores: Multiple Systems, Multiple Challenges
For most financial institutions, especially those that have grown through mergers or expanded their service offerings, relying on a single core system is rarely possible. Core integration links diverse systems—often from different vendors—so they can exchange data seamlessly. A single financial institution might use one core for loan management, another for deposits, and yet another for real-time payments.
However, these cores don’t always communicate out of the box. “If you have multiple cores that are not talking to each other, and you’re onboarding a new one, you don’t know how it will work with your legacy systems,” says RaoVallurNatt. “That is where a core integration provider sits.”
However, particularly for organizations looking to optimize resources, maintaining specialized integration teams doesn’t make business sense. “Just for the rare occasion it breaks, it may not make sense to have a full-time resource who’s doing nothing but watching it.”
Rather than hire in-house teams to function as an enterprise integration solution for complex integration tasks, many institutions partner with bank connectivity experts like Axletree. This frees them to focus on strategic goals while professionals handle the intricate web of back-end connectivity, addressing fragmentation challenges such as:
- Fragmented Tech Landscapes: Multiple technology vendors create “islands” of data. As RaoVallurNatt explains, “If you ask certain providers to make customizations so they can talk to another core, they won’t necessarily want to do it. That’s why you need an integrator to bring it all together.”
- New Requirements: As the industry shifts to new standards (e.g., ISO 20022) or new digital payment rails, older cores may struggle to keep up. An integrator ensures smooth communication despite evolving standards.
- Changing Regulations: Financial services face tight regulatory oversight, meaning frequent updates to back-end systems. Banks need integrators that can implement changes seamlessly across all cores.
- Scaling: Mergers and acquisitions or organic growth often lead to a tangle of overlapping systems. A robust integration layer helps avoid technical snags that slow down expansion.
Future Trends in Data Exchange: APIs vs. MQs
In recent years, there has been a surge in API-first approaches. APIs (Application Programming Interfaces) enable real-time, on-demand data exchange, making them ideal for instant transactions like checking a bank balance. However, they rely on continuous network availability, which could pose risks during outages. MQs (Message Queues), on the other hand, ensure reliable, asynchronous messaging, storing and delivering transactions even if one system is temporarily down.
“People go ‘API, API, API’… but there are certain things MQs are much better at than APIs,” says RaoVallurNatt. “What MQs have done so well, we are trying to replicate in a newer model which is not built for that. Call me a dinosaur, but I think developers will go all over the world and come back to some modified form of MQs. They need a protocol similar to MQ which has the advantages of APIs.”
The future of data exchange and messaging likely involves a hybrid model—leveraging the real-time advantages of APIs while retaining the robust, guaranteed delivery of MQs for mission-critical processes.
Choosing the Right Core Integration Partner
When core systems from different vendors need to communicate seamlessly, specialized expertise becomes invaluable—and this is where providers like Axletree enter the picture. While finding a reliable partner to manage your institution’s core integration can feel like navigating a complex maze, selecting the right provider is critical: a seamless, future-proof enterprise integration solution can set your financial institution up for long-term success.
Below are key factors to consider when choosing a bank connectivity partner:
- Deep Expertise in Financial Messaging: Your provider should understand legacy MQ systems, modern APIs, and evolving industry standards. “Financial messaging is a very, very variable monster,” says RaoVallurNatt. “The same thing doesn’t happen any two days running.”
- Ongoing Support & Reliability: Core integration isn’t a one-time setup—it requires continuous monitoring and quick fixes. “Let’s say you hire a vendor and they do whatever plugging needs to be done. And then they step out of the picture. It works now, but will it always work 100%? You will be stuck if something goes wrong,” says RaoVallurNatt. “You need somebody capable of running through it, making fixes, and making tweaks wherever necessary.”
- Future-Proof Solutions: With banking shifting to cloud-based cores and real-time payments, your provider should adapt to new technologies. It is important to stay ahead of regulatory shifts, new messaging standards, and digital transformation trends.
- Flexibility to Connect Multiple Cores: Different banks use different cores—your provider must bridge the gaps seamlessly. “We are like the traffic lights,” RaoVallurNatt says. “Each bank might choose a different core for different needs. Making them talk to each other and work together—that’s where a core integration provider is a huge help.”
- Uninterrupted, Seamless Bank Connectivity: Data errors and messaging failures can disrupt transactions. A good provider ensures real-time, fail-safe communication.
By prioritizing expertise, reliability, adaptability, flexibility, and seamless connectivity, you can choose a core integration partner that keeps your institution running efficiently. Axletree brings all this together—ensuring your financial systems stay connected, secure, and future-ready.
Charting the Path Ahead: Your Connected Future
Core integration might not dominate headlines, but it’s the foundation for financial services—be it mobile banking, real-time payments, or digital wallets. As the industry moves toward cloud-hosted cores and rapid data exchange, having a robust enterprise integration solution is no longer optional. Banks large and small face one key question: How do we ensure our core systems speak the same language and stay up to date?
The best answer often lies in partnering with experts who can handle these complexities end to end. RaoVallurNatt concludes: “Core integration isn’t a one-and-done project. You need a partner who can ensure everything keeps talking—even as the world keeps changing.”
In a market defined by relentless modernization, Axletree stands ready to help financial institutions navigate integration hurdles, reduce complexities, and focus on delivering exceptional value to their customers—no matter which cores they rely on.
Interested in speaking with someone to learn more? Connect with us at Axletree to learn how we’re leveraging the latest enterprise integration solutions to keep your cores running smoothly. Reach out to our team to get a free consultation with one of our bank connectivity and integration experts!
February 19, 2025
