Core Banking Systems

Definition ∞ Core banking systems are the central software applications that banks use to manage customer accounts and process transactions. These systems handle essential banking operations such as deposit, loan, and credit processing, as well as customer relationship management and regulatory reporting. They form the backbone of traditional financial institutions, enabling the recording and management of all financial activities. Modernization of these systems is a continuous effort to meet evolving customer demands and technological advancements.
Context ∞ In the context of digital assets, discussions around core banking systems often relate to their integration with blockchain technologies or digital currencies. Financial news frequently covers how legacy banking infrastructure struggles to interoperate with new digital payment rails, posing challenges for the adoption of central bank digital currencies and other crypto innovations.