The core banking system technology market for community banks continues to modernize at a steady pace. Vendors continue to proactively and profitably update their systems and service their customers even though the total addressable market continues to decline. All vendors have improved integration via API management platforms and rewritten some core code as microservices. Four of the 10 systems Celent evaluated increased their customer base even as the number of community banks declined. The core systems market remains an essential foundation for community banking sector technology.
Digital banking, open banking, and embedded finance offer vast potential for financial institutions. Community banks and the vendors that support them are taking a similar but distinct path to digital modernization relative to large banks. While large financial institutions drive digital transformation themselves with the assistance of IT consultancies and their technology partners, smaller financial institutions rely more heavily on their core banking system provider to create innovations for them.
The core vendors in this report are making a dramatic departure from past sales strategies, where closed-core systems and data access helped the vendor cross-sell more of its products but frustrated their banking customers. This report provides in-depth overviews of the main core platforms in the North American small bank market, helping financial institutions better understand the market for incumbent core platforms.
