Critical Requirements in Modern Core Banking RFPs

Kael TheoWritten by
Published onUpdated on

 

Introduction

 

Core banking modernization remains a top priority for financial institutions in 2024, with 78% of banks prioritizing platform upgrades (Gartner 2024). RFPs for these mission-critical projects demand meticulous vendor scrutiny, balancing technical resilience with digital transformation goals. This guide dissects common RFP requirements, evaluation frameworks, and pitfalls in procurement processes—drawing from recent public RFPs by Lloyds Bank, Commonwealth Bank of Australia, and the National Bank of Egypt.

 

Critical Requirements in Modern Core Banking RFPs

 

1. Cloud-Native Architecture

 

2024 RFPs overwhelmingly mandate cloud-ready solutions, as seen in the Bank of Ireland’s 2023 Core Banking RFP, which required:

 

 

“Multi-cloud deployment capacity with active-active geo-redundancy and PCI-DSS compliant container orchestration”

 

 

Vendors must demonstrate:

 

    • Hybrid cloud deployment models (AWS/Azure/GCP)

 

    • Zero-downtime patching capabilities

 

    • Compliance with regional data sovereignty laws (e.g., EU’s DORA, UAE’s CBUAE Cloud Guidelines)

 

 

2. Real-Time Processing Standards

 

The Reserve Bank of India’s 2024 Core Banking Guidelines now enforce:

 

 

“End-to-end payment processing latency under 50ms for 99.99% of transactions”

 

 

Evaluation criteria typically assess:

 

    • Batch processing elimination

 

    • ISO 20022 message compatibility

 

    • Concurrent user capacity (minimum 10,000 TPS in RFPs from Tier 1 banks)

 

 

Emerging Evaluation Frameworks

 

Banks are adopting weighted scoring models favoring business agility over pure cost savings:

 

 

Criteria Weight (2024 Avg.) Vendor Assessment Method
API-first design 25% Sandbox testing with bank’s OpenAPI specs
ESG alignment 15% Carbon footprint reporting & DEI commitments
Legacy decommissioning 20% Reference checks on prior migrations
Total cost of ownership 10% 7-year ROI modeling

 

Example: National Australia Bank’s 2024 RFP deducted 30% of scoring points from vendors lacking proven AI-powered reconciliation tools.

 

Best Practices for Vendors

 

    1. Template Customization:

       

        • Use the bank’s RFP numbering schema in responses (e.g., “3.2.1 Response” for requirement 3.2.1)

       

        • Embed compliance matrices with visual indicators (✓/×) for mandatory vs. optional features

       

       

 

    1. Proof Stack:

       

        • Include architectural runbooks from past deployments (redacted)

       

        • Provide third-party benchmarks (e.g., Gartner Critical Capabilities reports)

       

       

 

 

Procurement Team Recommendations

 

    • Pre-RFP Vendor Labs: Like HSBC’s “Project Nylon”, run 2-week sandbox trials before issuing RFPs

 

    • Anti-Lock-in Clauses: Mandate Kubernetes compatibility and escrow agreements for source code

 

 

Conclusion

 

The 2024 core banking RFP landscape demands vendors bridge regulatory hardening (Basel III, FRTB) with innovation delivery (GenAI copilots, quantum-resistant encryption). Winning submissions will align technical responses with business outcomes—for example, linking microservices architecture to reduced Time-to-Market for new products.

 

Resource: European Central Bank’s Core Banking Procurement Guidelines offers sample evaluation scorecards.

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