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Innowise is an international full-cycle software development company founded in 2007. We are a team of 1600+ IT professionals developing software for other professionals worldwide.
About us
Innowise is an international full-cycle software development company founded in 2007. We are a team of 1600+ IT professionals developing software for other professionals worldwide.

How to implement a core banking system using open-source solutions

According to the Digital Banking Platform Global Market Report, there will be a substantial expansion in the size of the digital banking market, from $6.68 billion in 2023 to $7.49 billion in 2024, reflecting a staggering compound annual growth rate of 12.0%. With the ubiquitous demand for convenient banking on the go, the challenge of becoming a digital-first fintech vendor to meet tech-savvy clients’ expectations has become increasingly significant. Following lockdowns and COVID-era restrictions, people expect brick-and-mortar banks to embrace more agility, allowing them to conduct financial transactions from the comfort of their homes without the burden of visiting a bank branch.

A decade ago, the lack of a substantial investment — somewhere in the range of $30-50 million — would have been a formidable barrier for any institution aspiring to automate its banking services fully and step onto the bank digital transformation path. However, the landscape has shifted dramatically nowadays, thanks to the advent of open-source technology that changed the paradigm for good. Recently, the open-source revolution has democratized the process drastically. It enables both budding startups and mature enterprises to construct a fully operational digital bank piece by piece using solutions available in the market in a budget-friendly manner.

Global usage

The number of active online banking users will surpass 2,55 bn by 2024 as digital-only banks continue to emerge at a rapid pace.
Source: Statista

What is digital banking?

In essence, digital banking implies digitizing all traditional banking products, processes, operations, and activities to serve clients through online channels. Digital banking facilitates customers to access a range of banking services seamlessly via their laptops, smartphones, and tablets, from account creation and onboarding to conducting payments and applying for loans anywhere, anytime.

Why choose open-source digital banking?

Choosing open-source digital banking solutions offers a range of advantages, especially for institutions looking to establish a strong, flexible, and scalable presence in the financial sector. The ability to customize and scale these platforms, coupled with their widespread usage and supportive community, positions open-source digital banking as a forward-thinking choice for every bank digital transformation strategy.

Wide usage & global reach

Today, digital banking platforms are utilized by a diverse and extensive user base, with over 10,000 commercial bank businesses worldwide, IBISWorld reports. Broad adoption of open-source platforms reflects the flexibility, robustness, and relevance of open-source digital core banking systems in various market conditions and regulatory environments, backed by continuous improvements and the evolution of the global community of developers.

REST API integration

REST API architecture enables easy integration with other systems and third-party services, allowing for a seamless connection between different banking functions and external applications. The REST API facilitates data exchange in a standardized format, making it more straightforward for institutions to add new features, comply with regulatory requirements, and ensure interoperability between disparate systems. From the end-user perspective, APIs enable individuals to receive immediate updates on their accounts and conduct transactions without intermediary involvement from a bank representative.

Convenient web interfaces

Unlike many traditional banking applications limited to legacy desktop environments, open-source digital banking platforms often come with convenient web interfaces. This means they can be accessed easily from any device with internet connectivity, enhancing user experience and accessibility through personalized customizations and exclusive configurations. The web-based approach aligns with modern consumer preferences for online banking, making it easier for customers to manage their finances on-the-go from any corner of the globe through novel core banking system software.

Cloud-agnostic & on-premises readiness

Incredibly flexible in deployment, open-source digital solutions are often cloud-agnostic, meaning they can be deployed smoothly on various cloud environments (public, private, or hybrid) depending on the institution’s needs and policies. Simultaneously, for organizations with specific compliance or security requirements, open-source digital banking solutions can also be deployed on-premises, providing complete control over the infrastructure and resources.

Need to transform your banking operations?

Seize the opportunity to innovate with open-source banking solutions.

Core banking system implementation: top use cases in 2024

Digital banking has now become a standard expectation among customers, pushing financial institutions to adapt and enhance their digital offerings continuously.
Online fintech lending offers individuals and business users an alternative avenue for providing loans entirely over the Internet, contributing to enhanced financial convenience and accessibility. Typically, these solutions use automated processes for underwriting and credit assessment, providing a more efficient, accessible, and affordable means of obtaining credit, be it personal loans, debt consolidation, or small business financing. Particularly, in the realm of P2P lending, fintech companies serve as intermediaries, connecting individuals or businesses seeking loans with willing investors for a nominal fee. As for the buy now, pay later (BNPL) scheme, it presents a form of short-term loan that empowers consumers to acquire items and settle payments over time, typically without incurring any interest. Concerning business loans, fintech lending companies also play a crucial role in assisting small businesses to access essential capital for growth since securing credit from traditional institutions can be challenging due to perceived risks.
A digital wallet is an online payment tool or software application that functions as a virtual counterpart to a physical wallet, allowing users to store digital representations of various payment methods securely. Using credit and debit cards, gift cards, cryptocurrency, as well as boarding passes, event tickets, passwords, and coupons, individuals can make purchases and pay bills on the go by tapping their smartphone or smartwatch over the contactless payment terminal. For instance, through quick response (QR) codes that encode information in a black-and-white pattern, users initiate a payment with a smartphone camera or their digital wallet’s scanning system. Near field communication (NFC), in turn, is a wireless data transfer technology that employs electromagnetic signals for devices like smartphones, tablets, and laptops to share and transfer data nearby, typically within an inch and a half, to establish a connection.
With no waiting times and fixed working hours, neobanks are devoid of any physical branches, existing exclusively in the digital realm. These entities aim to streamline the banking process by delivering financial services in a customer-centric, digital-only format, focusing mainly on core banking systems, with modules on accounts, payments, money transfers, lending, and more. While many neobanks are not obliged to have a banking license, enjoying slightly more autonomy than traditional banking institutions, they frequently partner with licensed banks to offer their financial services rather than operate independently. Boasting impeccable accessibility, fewer restrictions, and incredible ease of use, neobanks simultaneously provide lower fees and higher interest rates, released from the chains of spending money on rent, electricity, infrastructure, and other expenses that eat away significant sums at a traditional bank’s bottom line.
“Open-source digital banking offers unparalleled flexibility, transparency, and collaboration opportunities. Our experience has shown that embracing open-source solutions not only drives innovation but also fosters a community-driven approach to banking technology. We firmly believe in the potential of open-source digital banking, so we’re proud to integrate it into our software development practices and strategies and introduce Innobank.”

Alexander Nemtsov

Delivery manager & FinTech expert at Innowise

Introducing Innobank: white-label open-source core banking system from Innowise

With more than 17 years of experience in the fintech space, Innowise creates innovative digital banking solutions that help businesses elevate operational perfection and open new revenue streams. Our commitment to digital bank transformation has led us to embark on a bold software initiative. By combining the expertise of our business analysts, software engineers, and domain experts, together with the cumulative experience of notable core banking system providers, we developed Innobank. This is a full-featured, open-source, white-label core banking solution that supports a wide range of financial services. It includes user roles for both bank reps and end users, enabling them to manage loans, savings, and other financial products geared towards microfinance institutions.
  • Customers
Customer management functionality under the Innobank hood allows businesses to capture extensive data such as biometric information, demographic details, employment history, and financial behavior. This data is crucial for KYC (Know Your Customer) and user authentication processes. The customer management feature leads to better risk assessment, personalized product offerings, and improved customer services for identifying cross-selling and upselling opportunities based on customer profiles.
  • Accounts
This feature supports individual and group accounts, catering to both retail and corporate banking needs. It enables real-time updates on transactions and balances, supporting various account operations like transfers, withdrawals, and deposits. This option allows customers to enjoy a seamless banking experience with up-to-date information and convenient account management, leading to higher satisfaction and trust in the financial realm.
  • Lending
The lending module in Innobank handles diverse loan types, including microfinance, consumer, and mortgage loans, accommodating various interest rates, repayment schedules, and collateral management functionalities. Automating the lending process reduces the likelihood of errors, speeds up loan disbursement, and enhances the borrower’s experience, helping financial institutions manage risks associated with lending more effectively.
  • Deposits
Our seasoned developers implemented deposit management feature focused on time-bound and demand-based deposits government, with capabilities to handle compound interest calculations, maturity instructions, and penalty provisions for early withdrawal. This module makes deposit management more efficient and user-friendly, encouraging savings among customers and ensuring precise interest calculations.
  • Accounting
Innobank’s accounting component complies with international accounting standards, offering functionalities like double-entry bookkeeping, trial balances, and financial statement generation. This ensures financial institutions maintain accurate and transparent financial records, aiding in regulatory compliance and informed financial decision-making.
  • Reporting
We implemented customizable reporting tools to gain more visibility and manageability into banking processes, providing insights into various operational areas like portfolio performance, customer demographics, and financial health. With this functionality, banks can access 30+ detailed reports that assist them in strategic planning, operational management, and regulatory reporting, making their business moves more data-driven and responsive to market trends.
  • System administration
With an unwavering focus on cybersecurity, our team implemented a robust security framework for data protection, audit trails, and activity logs, along with customizable user roles and permissions for controlled system access. We made sure Innobank goes in line with the integrity and security of every banking system, regardless of its size and complexity, protecting sensitive financial data and mitigating risks related to data breaches and fraud.
  • Organization administration
This module covers tools for structuring the organization, managing internal communication channels, and aligning operational processes with strategic goals. Mainly, the organization administration module revolves around managing working days, employee records, office branches, and more specific banking-related options like currency configuration, cashier management, and bulk imports.
  • Products
Through this powerful feature, Innobank supports the creation of tailored financial products with specific eligibility criteria, pricing models, and terms and conditions. This enables institutions to deploy diverse and innovative financial products rapidly, address unique market needs, and promote financial inclusion and scalability for the banking vertical globally.
  • Batch processing
Since banking requires instant and accurate calculations, batch processing in Innobank is indispensable for handling tasks like interest calculations, end-of-day processes, and bulk transaction processing. This increases operational efficiency, reduces processing errors, and ensures the timely execution of repetitive and large-scale tasks.
  • Integrations
Innobank’s integration capabilities include connections with payment gateways, credit bureaus, mobile money platforms, and other fintech services. This allows institutions to offer a broader range of services, enhance customer convenience, and stay connected with the evolving fintech ecosystem.

Does your business need a swift shift online?

Unlock the disruptive potential of Innobank – white-label digital core banking solution from Innowise.

Core banking system implementation: our project lifecycle

Developing a new core banking system involved a structured project lifecycle, ensuring the end product was tailored to meet specific business needs and objectives.


Requirements gathering & gap analysis

At this initial stage, our project team analyzed the specific needs and intricacies of the banking environment, working closely with banking domain experts and IT departments to identify functional requirements. This process involved determining which features of Innobank can be used ‘out-of-the-box’ and where customization is necessary.


Architecture design & tech stack selection

Following requirement elicitation, we mapped out a detailed plan for Innobank implementation. We agreed on the core banking system architecture design, technology stack selection, and integration plans with other systems (like CRM, payment gateways, etc.). Ultimately, our talented specialists set up a project management framework with clear timelines, milestones, and resource allocation.


Development & quality assurance

During this stage, we focused on building the Innobank banking platform, with our vetted developers integrating third-party services and modifying the platform in accordance with the design specifications. Concurrently, our QA engineers conducted rigorous testing for functionality, performance, security, and user acceptance, ensuring the software is robust, secure, and user-friendly.


Deployment & go-live

Once development and testing were completed, the system was ready for deployment. Before the go-live, we performed a final round of pre-launch checks, including system validations and user training, to ensure employees’ readiness and smooth performance for our cloud-based core banking system without glitches. This marked the project’s culmination, allowing Innowise’s teams to start reaping the benefits of a full-fledged core banking system software and help businesses pursue long-term business goals.

Challenges vendors face when developing and implementing an open-source core banking system

Developing a digital banking solution like Innobank is a complex and multifaceted endeavor, fraught with unique issues that must be navigated carefully to ensure project success. While the open-source nature of digital core banking systems provides a flexible and robust starting point, adapting software to the specific needs of a financial institution in terms of regulatory, cultural, and technological landscapes presents distinct challenges.

Regulatory variations

Financial institutions operate under strict regulatory environments, which vary significantly from country to country. When developing a digital bank, it is crucial to ensure that the system complies with varying legal frameworks, reporting standards, and compliance protocols, eliminating the slightest risk of costly penalties and trials in case of violations.

Local customization

Catering to local markets often requires the digital banking system to support multiple languages and consider local cultural nuances in the user interface and customer interactions. Developers should customize modules, extending beyond mere translation and designing interfaces and interactions that resonate with local preferences and practices.

Scalability needs

While open-source solutions offer a solid foundation, they often require significant fine-tuning and optimization to scale efficiently with the growing customer base and transaction volumes. With this in mind, developers should focus on technical challenges related to database management, application architecture, and resource optimization to ensure burden-free scalability.

Data security

Though data security is paramount in digital banking, different countries have varying data protection laws and standards, restricting or sometimes limiting the use of cloud-based deployments. It is essential to develop fintech core banking systems that consider diverse and often stringent data protection regulations across various regions regarding security protocols and data encryption.

Wrapping up

The journey of implementing a core banking system using open-source technologies, exemplified through the lens of Innobank, has fundamentally altered the banking landscape. Previously, the development of a digital bank from scratch was a privilege reserved for wealthy and large-scale banking institutions. It required significant capital, resources, and technological infrastructure, often making it an impossible challenge for smaller players in the financial sector. However, the current landscape tells a different story – one where even a startup can aspire to and successfully launch a digital bank. The democratization of technology, led by open-source platforms like Innobank, has leveled the playing field, making it possible for organizations of all sizes to venture into digital banking with more confidence and fewer resources.

Innowise, with 17+ years of experience in the fintech domain, builds sophisticated digital banking solutions, excelling in areas where other outsourcing vendors show signs of hesitation. From bank API integrations to configuring core banking system components, we put in the aggregate experience of 1600+ accomplished specialists to present digital solutions that reshape the fintech horizon and open new business opportunities. The skills and experience we bring to the development of financial technology solutions extend beyond simply creating software as we cement financial diversity and inclusion. Opt for us, and let’s start great things together.


Innobank is designed with flexibility in mind, allowing for customization to meet diverse regulatory requirements. It supports configurable workflows, reporting tools, and compliance modules tailored to align with specific legal frameworks and reporting standards of different jurisdictions.
Innobank can integrate with legacy systems using its robust API framework. Nonetheless, meticulous planning and a phased integration approach are needed to remediate data format discrepancies, differing communication protocols, and stability issues during integration.
Innobank supports risk management and fraud detection through customizable rule-based engines that can monitor transactions for suspicious patterns. However, for more advanced needs, it often requires integration with specialized third-party risk management and fraud detection systems.
While Innobank can handle a significant volume of transactions, scalability depends on the underlying hardware and network infrastructure. To extend these limits, organizations can optimize database configurations, scale server resources, and implement efficient load-balancing techniques.
Alexander Nemtsov Fintech expert at Innowise


Alexander Nemtsov Fintech expert at Innowise

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