What is banking software?

Banking software is enterprise software that is used by the banking industry to provide and manage financial services to the public. Otherwise referred to as core banking software(CBS), the banking software is equipped with the basic features needed to run a bank effectively and connect with other applications to provide full-scale service to customers.

Cameroon is crowded with banking software and they range from the least sophisticated to the most sophisticated. The software sophistication is proportional to the cost of the license. Some of the popular software in the market include but are not limited to SAFE Software(Cameroon), Oracle Flexcube(USA), Sopra Banking (France), Bankers Realm (Kenya), PERFECT(Togo), Temenos AG(Switzerland), Alphabank(Cameroon), and Globalbank(Cameroon).

5 things to consider when acquiring banking software in CEMAC

Before a bank or microfinance institution ventures into acquiring new software, it is important to verify if the said provider meets the following conditions ;

  1. Local data center: A data center is a physical location that stores computing machines and their related hardware equipment. Most software vendors work online and data are stored in cloud servers. Cloud servers have their advantages and challenges. Talking of challenges, the servers may go down and the user won’t be able to access data. Thus, it is important to have a local data center to easily collect data and serve clients.

Data centers can be expensive to build, but software vendors go for the option of providing local backup in the banks. In the event of In case of technology problems with the software, the clients can be rest assured that they can access their data from the backup. Thus, it is important to check this out with any vendor.

  1. Approval by the regulatory authorities: Cameroon is a member state of COBAC  and OHADA. These authorities have put in place regulatory frameworks to govern the conduct of business. For example, OHADA has regulations on the conduct of business,  accounting policies, and reporting standards for companies found in their member states. Similarly, COBAC, the regulator of credit institutions has established regulations on banking activities and given guidelines on modules every banking software should have. Therefore, the software provider should sell solutions that are in line with these standards. Some software in Cameroon is not adapted to the market and as a result, banks suffer losses and operational failures.
  1. Local Support staff: One of the problems faced by banks regarding software is support. Provided most vendors are foreign companies with no local staff, it is time-consuming and costly for banks to seek support from these vendors. Thus, it is important to go for a provider who at least has a local support team.
  1. Core banking features: What makes a banking software stand out from others is the availability and functionality of core banking features. Each software should be equipped with an administration module (office, users, branches, etc), clients/members(KYC), products(loans, deposits), reports, and accounting. Worth mentioning that the more sophisticated a software is, the higher the total cost of acquisition would be.
  1. Added value services: Given the growing demands of banks’ clients, it will be a loss for a software provider to limit itself to having core banking modules. A banking software should come with additional services like mobile banking, SMS banking, budget, HR and payroll, USSD banking, and business analytics because those are the services the end users need daily.

The bottom line

Banking software is a solution with core modules and added value modules translating the operations of banks and microfinance institutions in an automated manner. Acquiring banking software is a critical investment decision each bank should make because making the wrong decision and buying banking software not meet our conditions aforementioned can lead to drastic technological consequences. 

Banking software is one of the most valued assets on a balanced sheet of banks. Thus, any credit institution has the leeway to acquire software of their choice yet it is important to go for the one that corresponds to the requirements of the regulator and meets the demand of the market.