Core Banking 101: Why do Neos need it?


Core Banking…doesn’t sound like the sexiest topic, does it? More like ‘snore’ banking? But after a refreshing chat with Tomasz Kromrych, Solutions Adviser for Financial Services at SAP, and our own Greg Steel - #nerdyxinja – aka our Chief Architect, we were like. “Core!!! Banking!!!”

Have a read of the full article here, we’d love to know what you all think! Let us know in the comments below:


I hate to be negative but I didn’t find that blog post particularly encouraging. You mention that -

Core banking is by its nature ‘account centric’ (not ‘customer centric’). “Where most other banking systems have gone wrong is allowing that account centric nature to define how they are delivering services,”

And it’s obviously those types of constraints that you’re trying to avoid when building a new banking platform. But then go on to say that SAP has -

taken its heritage applications and “re-platformed the infrastructure they are on to be cloud-like”

So it sounds like SAP has replicated the traditional core banking architecture to a certain extent. The point is, if you did want to do something like switch away from an account focused architecture to a customer focused architecture - you can replicate account functionality without accounts after all, for more flexibility - then presumably you’d be constrained by SAP’s design & less able to customise it for your needs.

I appreciate the fact that there’s a trade off here & that adopting the SAP platform will presumably enable you to get to market sooner. But if you were planning for the long term & really trying to shake things up, I expect you’d value increased flexibility more.

Lastly -

We need new banks (aka ‘neobanks’)

I agree with Valentina Kristensen’s definition of neobanks being banks that offer banking services but that don’t have a banking license. Xinja has has a license so you’re a proper ‘challenger bank’ :muscle:


Hi @alexs Alex - lots of differing definitions of ‘neobank’ out there! and thanks for the ref to Kristensen’s - but we’re sticking with banks that are banks (have licenses) but are redesigned banking experiences. ‘Challenger’ banks are traditionally still not changing the fundamental models, products or process - but rather just coming at the market with new brands. I think you can argue various cases on this…all with some validity! :slightly_smiling_face: As to the specifics re SAP, I’m going to take you to the horse’s mouth on that and get @xinjanerd to respond…he’s busy but I’ll get him!


You’re right that we will get to market much faster with SAP than building new Core Banking capabilities, but we would never do this if it compromised our vision of customer-centric banking.

It’s probably something we could talk about all day, but the short story is about the “lean-ness” of our approach to Core Banking. An Account is a service that we can offer a customer, it isn’t the customer and doesn’t represent the customer. For us the customer is in the middle of what we think about, and the strength of our approach is that we are not using a bulky Core Banking platform that tries to do everything, rather we are using a lean Core Banking platform that does a great job of managing Accounts.

Then we can bring our Xinja thinking and energy to building and delivering our customer engagement, without being boxed in by the Core Banking platform.

Does that make sense?


CBA and Macquarie both use SAP in Australia and neither strike me as leading edge, innovations and certainly not quick to innovate in banking. SAP is also a massive company. Can you help me understand why they are the right fit for a start wanting to move quickly and I assume economically.


You’re absolutely right and we thought the same thing.

What we found out late in the day about SAP is that they also figured out some time ago that they weren’t a great fit for the Digital/Neo bank market and have been heavily investing in getting themselves into it. They massively modernised the underlying platforms that their banking systems run on (read about HANA at - it’s a bit dry, but it makes a big difference to what SAP can do with their legacy software), and by putting in place API’s that are as good as anything the newer born-in-the-cloud platforms provide. This modernisation allows them to deploy easily to cloud (internal or public) and, most importantly for us, allows them to scale down to Xinja-size, and then grow with us. This isn’t the same banking platform that is running in the other Australian banks, in fact we will be one of the first banks in the world to go live on it.

It doesn’t bring them to the same technology level as Mambu or ThoughtMachine but it strikes a good balance, and SAP’s maturity in the Australian market put them overall ahead.