The past few decades, the worldwide banking sector has undergone a massive transformation. According to Grand View Research, The global banking market size is projected to witness growth of 6.2% & reach $ 57.8 billion by the end of 2030. Whether it’s blockchain or AI/ML, modern technologies have played a significant role in making banking operations more intelligent and faster. This blog will shed light on different technologies that take custom banking software development to the next level. Let’s get started.
5 Technologies Used for Banking Application Development
Banking & financial software development is a complex process and it requires specialized skills and a number of technologies. Let’s look at the top 5 technologies that are widely used for developing banking software applications.
- Core Banking Systems
Custom banking software development highly depends on the CBS or core banking system. This refers to the central system that can manage diverse banking transactions, account management, banking operations, etc. Technologies used for core banking development and maintenance include:
- Legacy Systems or Mainframes: Despite the advancements of cutting-edge technologies and trends, many banking sectors still depend on mainframes for financial operations. Common Business-Oriented Language (COBOL) is mostly used to program mainframes or legacy systems.
- Relational Databases: CBS requires a reliable and robust database to manage large amounts of financial data. Different relational databases like SQL Server, IBM Db2, and Oracle are mostly used for managing transactions and complex queries.
- Middleware Interface: Modern technologies like Apache Kafka, Oracle Fusion Middleware, and IBM WebSphere are mostly used to ensure smooth data exchange and seamless communication between different components of CBS.
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- Digital Banking Platforms
These factors allow customers or consumers to access all kinds of financial services online. Developing digital banking platforms involves different technologies to improve user experience, scalability, and security.
- Front-end Technologies: For online banking solutions, different technologies like HTML, CSS, and JavaScript are extensively used. Apart from that, different frameworks like React, Angular, & Vue.js are also used to develop visually appealing and responsive user interfaces.
- App Development Frameworks: Banking apps are developed using different frameworks like Flutter, React Native, Swift, Kotlin, etc. These banking application development frameworks help developers create high-performance cross-platform apps for several financial solutions.
- Cloud Computing: Different cloud computing technologies like Microsoft Azure, Google Cloud Platform, and Amazon Web Services provide scalable infrastructure to deploy and manage digital banking platforms. Cloud solutions offer enhanced security levels, cost-efficiency, and flexibility to banking platforms.
- Microservices and APIs: Microservice architecture and Application Programming Interfaces play an important role in developing digital banking platforms. They enable the integration of third-party applications and third-party applications. In addition, RESTful APIs & other technologies like Kubernetes and Docker are also used for digital banking.
- Security Technologies
Security plays a vital role in the banking software development solution as it deals with sensitive financial data & transactions. Different technologies are employed to enhance the integrity and security levels of digital banking platforms.
- Encryption: Encryption technologies such as RSA & AES are extensively used to safeguard information. These technologies always ensure that sensitive data is accessible to authorized financial parties only.
- Multi-Factor Authentication: MFA or Multi-Factor Authentication effectively improves security levels by offering multiple verification factors for account access. Different technologies like one-time passwords, hardware tokens, and facial recognition or fingerprint are mostly used for this authentication.
- IDPS: Several IDPS (Intrusion Detection & Prevention Systems) technologies like IBM QRadar, Suricata, and Snort are used to track network traffic for potential threats and suspicious activities. They also help to prevent ransomware and cyber attacks on the banks, institutes and financial institutions.
- SSL/TLS: Secure Socket Layer (SSL) & Transport Layer Security (TLS) protocols are used to build secure connections between servers and clients. SSL/TLS ensures that all data transmitted through the internet is fully encrypted.
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- Artificial Intelligence & Data Analytics
With the introduction of technologies such as AI and Data Analytics which helps to understand the personalized requirements of the consumers and helps in boosting the decision making process.
The following technologies are used in AI and data-driven solutions:
- AI/ML: Artificial Intelligence and Machine Learning technologies are extensively used for different banking applications like risk assessment, personalized marketing, customer segmentation, fraud detection, etc. Tools like Scikit-learn, PyTorch, and TensorFlow are used to create machine-learning models.
- Big Data Technologies: Banks and financial institutes usually deal with a large amount of data from different sources. Several technologies like NoSQL databases and Hadoop are extensively used to process and analyze large datasets.
- BI Tools: BI (Business Intelligence) tools like Power BI, QlikView, and Tableau help banks analyze information and give insights to make strategic decisions. These tools also help in visualizations, dashboards, and report generation.
- Blockchain
Many organizations are implementing the blockchain due to its benefits such as creating transparency and enhancing security within the premisies. This technology gained immense popularity in the banking and financial industry. Here are some blockchain technologies used in banking software applications.
- Cryptocurrencies: Popular cryptocurrencies like Ethereum and Bitcoin enable transparent and secure transactions with zero intermediaries. Some banking sectors use cryptocurrencies for digital assets and cross-border payments.
- DLT Technology: DLT (Distributed Ledger Technology) helps participants have copies of a ledger. This ensures high immutability and transparency. Banking sectors leverage DLT technologies like KYC compliance, cross-border payments, supply chain finance, etc.
- Technical Coding: These are the codes which are self- executed to perform the various tasks within the organization. They mostly run on different platforms like Ethereum and help in the secure and automated execution of agreements. Banks leverage this technology for syndicated loans, insurance, and trade finance.
Benefits of Using Technologies in Banking Software Development
The successful integration of the above-mentioned banking software development technologies brings huge benefits to financial sectors & their consumers. Some of the prime benefits of these technologies include:
- Better Customer Experience: Advanced technologies help financial institutions and banks deliver very convenient and personalized solutions across different channels like online banking platforms, mobile applications, and social media. Therefore, customers can access banking solutions without hassles. This leads to improved customer experience and satisfaction.
- Improved Operational Efficiency: By integrating core banking systems or AI, banking sectors can seamlessly automate their manual tasks, streamline workflows, drive innovations, and mitigate the risk of errors. High efficiency allows banks to reallocate valuable resources to other critical financial tasks.
- Enhanced Security:Encryption, MFA, SSL/TLS, and other security technologies ensure that sensitive financial information is protected from unauthorized access. This maintains confidentiality and data integrity. Moreover, these technologies also protect customer data from scams, cyber threats, and hacking.
- Data-driven Insights: By integrating artificial intelligenceand data analytics, financial institutions and banks can effectively gain insights into customer behavior, preferences, and the latest market trends. This is known as a powerful approach that allows banks to customize their services, unlock new business opportunities, and make data-driven decisions.
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Conclusion
Modern technologies and trends make banking and financial operations more customer-centric, secure, and efficient. From digital banking platforms to core banking systems, diverse technologies are employed in custom banking software development. Tech transformation in the banking and financial sectors isn’t a one-time endeavor, this is a continuous procedure that requires innovation, adaptation, and commitment to remain relevant in today’s digital landscape.
FAQ’s
- How to build banking software?
Developing a banking software application involves different stages, from project planning to design and development. Here is a quick guide to the banking software development process:
Step 1: Define all your project objectives
Step 2: Conduct market research & find an audience
Step 3: Focus on competitor analysis
Step 4: Start user interface design
Step 5: Start front-end & back-end development
Step 6: Conduct testing and quality assurance
Step 7: Start software maintenance and updates
- What is software development in banking?
As the name suggests, banking software development is a process of designing, developing, and crafting software applications to meet the needs of financial institutions like banks and financial sectors. These software systems are specifically designed to manage a diverse range of banking operations such as account management, customer relationship management, transaction processing, regulatory compliance, risk management, loan processing, etc.
