Difference Between Core Banking and Internet Banking

Almost everyone has a bank account nowadays. A bank is an institution that deals with the financial assets of ordinary people.


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Which of these is an International Financial Institution?

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In the most basic sense, banking deals with the usual money deposition by the people and then lending this money to business ventures.

The profit garnered from these business ventures is returned as an interest to the depositor.

People are generally perplexed when the difference between core and internet banking emerges.

Albeit many consider both the same–there lies a subtle difference.

Key Takeaways

  1. Core banking refers to the centralized banking system that allows customers to access their accounts from any bank branch.
  2. Internet banking refers to the system that allows customers to access their bank accounts using the internet.
  3. Core banking is a physical system, while internet banking is a virtual system.

Core Banking vs Internet Banking

Core banking refers to centralized services that enable financial institutions to manage customers’ accounts, loans, and transactions seamlessly across branches. Internet banking, however, provides customers with the convenience of accessing banking services remotely through secure online platforms, allowing for account management, bill payments, and fund transfers without the need for visiting a physical branch.

Core Banking vs Internet Banking

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Core Banking is a rudimentary system that provides a score of services–not only helpful for the depositor but bank officials as well.

On the other hand, Internet banking works as an ancillary and is merely a minor instance of core banking.


Comparison Table

Parameter of ComparisonCore BankingInternet Banking
DefinitionCore banking is the banking construct where the depositor and account information is centralized to the bank server instead of being stored at a single branch.Internet banking is the banking interface which allows a customer to make or receive payments online using their portable mobile or computer devices.
Storage of InformationCore banking systems employ large centralized servers that store account-related information from all the branches of that particular bank in a single memory location.Internet banking system generally employs online banking software that requests information access from the central bank server and stores it in the user application for instant perusal.
Services OfferedCore banking renders many basic and advanced services such as transactions, servicing loans, establishing interest rates, and handling mortgages and payments.Internet banking is mainly deployed for personal services such as viewing account balances, transferring money between accounts, and making small payments.
Customer Relationship ManagementCustomer relations are at a nascent stage in the core banking system. It strives to resuscitate customer grievances using net banking.Internet banking provides more significant customer interaction through personalized apps, and grievance redressal becomes swift.
Security ConcernsCore banking has security issues if data storage is on-premise. This is mainly due to a lack of confidentiality.Internet banking poses a significant threat if the linking application is not secure, such as weak passwords.


What is Core Banking?

Core banking refers to a streamlined process wherein deposits, transactions, and other bank-related activities can be carried out from any branch of a particular bank.

This comes irrespective of the branch where the account was first created.

CORE stands for Centralized Online Real-Time Environment banking.

It tends to be more suitable for bank officials by reducing the front-end workforce, as most tasks are automated.

The significant advantages offered by core banking are–swift customer service, automation of accounting tasks,  diversifying the scope of operations, and bringing down operational charges.

The services offered by core banking include–transactions, loans, financial moratoriums, and much more.

core banking

What is Internet Banking?

Internet banking, also called Web banking or Online banking, is a banking system where transactions can be done via online banking software instead of being physically present in a bank.

This reduces the need to travel to the nearest bank branch, even for a small account statement. Also, bank accounts in different banks can be accessed from the same online payment software application.

The significant advantages offered by internet banking are–instant grievance redressal, no physical presence required, faster operation

, no geographical restrictions, and foremost–high data security.

The services offered by internet banking are–viewing account balances, transferring money between accounts, recharging phones, and paying bills.

internet banking

Main Differences Between Core Banking and Internet Banking

  1. Core banking is the primary banking approach, whereas internet banking is a part of it.
  2. Core banking uses centralized servers to store customers’ information, while internet banking uses application software to request a copy of the account information from the bank server.
  3. Core banking allows a customer to retrieve services from one of the many branches of a particular bank only. On the other hand, internet banking allows greater flexibility by providing access to many different banks through a single application.
  4. Core banking has a nascent approach towards Customer Relations Maintenance, while Internet banking employs the same from the easily personalized net banking software.
  5. Core banking is considered more reliable than internet banking, while internet banking is considered very safe unless there is a ransomware attack!
Difference Between Core Banking and Internet Banking
  1. https://dl.acm.org/doi/fullHtml/10.1145/1330311.1330322
  2. https://www.emerald.com/insight/content/doi/10.1108/10662240010312048/full/html
  3. https://ageconsearch.umn.edu/record/19246/files/sp05ka03.pdf
  4. https://www.sciencedirect.com/science/article/pii/S1877050910005703
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