Neocortex core critical to real-time data-driven banking

Igor Remez, Deputy Head of IT, PrivatBank

If we think of core banking technology systems as a brain, the majority of modern financial companies are positively reptilian. Just as the simple reptilian cortex is responsible for only the most basic survival needs, basic legacy systems at banks readily handle basic functions. However, these systems lack the ability to change and adapt to rapidly shifting needs. Legacy systems have no capability to plug in new APIs or assemble new business processes quickly or easily.

Much like modern humans gained their intelligence through the addition of the neocortex on top of the reptilian brain, adding a cloud-based digital core as a new layer running on top of legacy banking systems is giving banks (ours included) new capabilities to adapt and react.

Thinking of APIs that provide specific functionality as blood vessels in this brain, a digital core neocortex makes banks capable of easily introducing and utilizing these vessels as processes. Handling these API-based processes in the cloud, this neocortex makes it simple to adapt quickly to the changing business environment that today’s banks face.

To give a specific example about which we have personal knowledge, PrivatBank was able to solve its account processing issues by adopting a digital core made available by the Corezoid Process Engine (more on this below).

The neocortex of the brain

The addition of a neocortex-like digital core is necessary for banks to adapt and thrive in an industry that’s becoming increasingly data-heavy and complex. The total number of transactions that a bank’s customers go about every day – depositing funds, making withdrawals, performing transfers between different accounts, etc. – can easily reach into the hundreds of thousands.

That’s not to mention the many additional calculations a bank must perform each day in order to satisfy regulatory compliance requirements, which call for assets to be monitored and key metrics reported. Put together, banks now face the challenge of handling daily calculations reaching into the millions and growing. It’s a task that is placing undue strain on the traditional technology most banks still rely upon.

Unfortunately, the reptilian legacy banking software that served banks well throughout the end of the 20th century – and is still widely used – looks antiquated in our current age of fully digital solutions and real-time responsiveness.

Of course, the shortcomings of traditionally designed banking software affect customers as well. A customer may have an important reason for needing to know the exact balance of an account in real-time, but have a bank with systems incapable of that level of accuracy or timeliness. This customer, or any other, might be confused to check an account’s balance in different ways – by calling the bank, by viewing an ATM receipt, though the bank’s mobile app, etc. – and get different information from each.