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Core banking
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The essential systems and processes that financial institutions use to manage customer accounts and transactions, including deposits, withdrawals, payments, loans, and account maintenance.
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Core banking serves all customer types by keeping their accounts and products consistent and up to date.
Examples include:
* A retail customer checking their balance
* A small business receiving card settlements
* A bank updating credit card statements
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* Opening a new checking account
* Updating balances after interest accrual
* Posting a card purchase to an account
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Transaction banking
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The set of instruments and services that enable corporate and institutional clients to execute and manage day‑to‑day financial transactions, such as payments, cash management, and account‑to‑account operations.
Core banking provides the underlying accounts and ledgers those transactions post to.
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Transaction banking typically focuses on large corporate and institutional clients. It helps them manage operational cash flows, liquidity, and risk by extending core banking accounts and ledgers into specialized services.
Examples include:
* A treasurer consolidating cash positions across accounts
* A company using letters of credit for international trade
* A bank defining calendars and holidays to control when corporate transactions can be executed and settled
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* A bank creating and managing DDAs for corporate clients to hold operational cash
* A multinational corporation paying suppliers in multiple countries
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