By John Wilson, Head of Solutions Engineering
In modern banking, real-time transaction processing is crucial. Customers expect instant access to their money, whether they're making a purchase at midnight, withdrawing cash during a holiday, or receiving a deposit while the bank’s Core system is offline. But traditional Core banking systems were not built for 24/7, real-time money movement.
This is where digital twin technology comes in. It is a real-time transaction ledger that can do more than just update balances - it ensures that funds are available for use—even when the Core is down. But how does this work? And can a customer actually spend money added to their account while the Core is offline?
The short answer is yes. If a bank shifts transaction authorizations to Digital Twin, funds are reflected instantly and can be spent—even before the Core updates. Let’s break it down.
Core Banking Systems and Different Balance Types
To understand how Digital Twin makes funds available, we need to look at how traditional Core banking systems track balances. Different Core systems handle balances in different ways, but typically, there are two key types:
- Available Balance – Reflects all incoming deposits, even if they haven’t been fully processed. Think of an ACH deposit under review or a wire transfer that hasn’t settled yet. The money is technically there, but some rules may prevent it from being spent immediately.
- Collected (Ledger) Balance – Represents cleared, settled funds that have officially been posted to the account. This balance is often referenced for outgoing transactions like ACH payments or wires.
How Traditional Cores Handle Transactions
- When money comes in, most Cores first update the Available Balance but this money might not be included in the Collected Balance until it’s fully processed.
- When money goes out, most Cores reference the Collected Balance to ensure funds have fully settled before allowing payments.
How Digital Twin Ensures Fund Availability During Core Downtime
In a digital twin-enabled environment, banks can choose to authorize transactions at the digital twin level instead of directly through the Core. This means:
- Deposits reflected instantly – When a customer receives funds, Digital Twin updates the balance immediately, even if the Core is down.
- Spending enabled – Since the digital twin tracks balances in real-time, it can allow outgoing transactions based on the Available Balance when the Core is offline.
- Core updates when back online – Once the Core is back, it synchronizes with Digital Twin to reflect all transactions.
Example: Spending Funds While the Core is Down
Let’s say a customer receives a $20 deposit at 10 PM, but the bank’s Core system is offline for scheduled processing. Can they spend that $20 before the Core comes back online?
With digital twin technology, the answer is YES.
- The Available Balance is updated immediately by Digital Twin.
- Since Digital Twin is handling transaction authorization, it knows the funds exist.
- The customer can use that $20 to make a purchase or withdraw from an ATM.
- Once the Core is back online, it syncs with Digital Twin to update all transactions.
This process is similar to how ATMs operate during holidays using stand-in processing—allowing transactions even when the bank’s systems are unavailable.
Why This Matters for Banks and Fintechs
1. Ensuring 24/7 Availability
Traditional banking Cores weren’t built for real-time, always-on transactions. With Digital Twin, banks can keep payments, withdrawals, and deposits running smoothly even during:
- System upgrades & maintenance
- Unexpected outages
- M&A-driven Core migrations or when switching from one Core to another
2. Digital Twin: The Future of Resilient Banking
The ability to spend money even when the Core is offline isn’t just a convenience—it’s a fundamental shift in how modern banks operate. By handling real-time authorizations and syncing with the Core once it's back online, Digital Twin creates a more resilient, efficient, and customer-friendly banking experience.
As financial services evolve, banks that embrace digital twin technology will be better equipped to meet the demands of 24/7 banking.