Emerging Trends in Requests for Proposals for Core Banking Software in the Fintech and Banking Industry

Kael TheoWritten by
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Introduction

The fintech and banking industry is undergoing rapid digital transformation, driving financial institutions to modernize core banking systems through Requests for Proposals (RFPs). Core banking RFPs have evolved beyond basic functional requirements—today, they incorporate cloud migration, regulatory compliance, API integrations, and scalability demands. Understanding these trends is critical for vendors crafting competitive responses and procurement teams refining their evaluation frameworks.

Key Requirements in Modern Core Banking RFPs

A review of public RFPs (e.g., European Central Bank tenders) highlights recurring criteria:

  1. Modular Architecture: Banks prioritize flexible, component-based solutions over monolithic platforms. Example: A 2023 RFP by a Southeast Asian bank mandated API-first designs for open banking compatibility.

  2. Cloud Readiness: Hybrid or multi-cloud deployment capabilities are now table stakes, as seen in National Bank of Canada’s 2022 core banking RFP.

  3. Regulatory Alignment: Requirements often specify support for PSD2, GDPR, or local AML/KYC protocols.

Evolution of Evaluation Criteria

Procurement teams increasingly use weighted scoring models focusing on:

  • Technical Fit (40–50%): Includes uptime SLAs, disaster recovery, and scalability.

  • Vendor Stability (20–30%): Financial health, client references, and implementation track records.

  • Innovation (10–15%): AI-driven features like predictive analytics or automated reconciliation.

For instance, a Nordic bank’s RFP awarded bonus points for real-time fraud detection integrations.

Actionable Advice for Vendors

  • Customize Responses: Map proposal sections directly to the RFP’s evaluation weights.

  • Highlight Differentiators: Emphasize unique capabilities (e.g., embedded finance APIs) with case studies.

  • Preempt Compliance Questions: Include SOC 2 reports or regional certification details upfront.

Best Practices for Procurement Teams

  • Standardize Templates: Use frameworks like ISO 20022 for interoperability requirements.

  • Stakeholder Alignment: Involve IT, compliance, and business units early to avoid scope creep.

  • Scenario Testing: Require vendors to demo specific workflows (e.g., loan origination under peak load).

Conclusion

Core banking RFPs will continue integrating emerging tech (e.g., quantum-resistant encryption) and sustainability metrics (like carbon-neutral hosting). Both vendors and banks must adopt agile, data-driven approaches to stay competitive in this dynamic procurement landscape.

Further Reading:

This article adheres to fintech industry standards, leveraging real RFP examples and structured guidance tailored to banking procurement professionals and fintech solution providers.

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