GIC Software | 5 Best Features for Financial Institutions

What Are the 5 Best GIC Software Features for Banks and Financial Institutions?

Banks and financial institutions know that the right GIC software is one of the most critical components of a core banking system. It not only provides a trusted foundation for creating and offering a diverse range of deposit products that appeal to a wide range of investors, but its underlying technology can connect financial institutions with key industry partners and ensure compliance, security, and efficiency in GIC operations. This financial software is particularly important today, as more and more Canadians are choosing to move their money and excess savings into the safety and security of GIC investments.

While guaranteed investment certificates (GICs) have long been a staple of both risk-averse investors and investors with a shorter investment time horizon, the recent growing popularity and resurgence of GICs is a financial investment trend that’s being driven by a complex combination of economic factors. These factors include rising interest rates, record-high inflation, market volatility, a unique yield-curve inversion, and ongoing economic uncertainty. As some Canadians are shifting their investments into GICs and term deposits to avoid the volatility of stocks and equity markets, others are simply moving their excess savings into these trusted investment vehicles because they are safe, insured, and provide a guaranteed return on investment. Banks and financial institutions that have already implemented a powerful GIC software solution have been able to effectively respond to the dramatic increase in demand for GICs and fixed-term deposits with minimal effort and resources, and they are capitalizing on the trend by leveraging some key features of GIC software, like powerful automation technology and the ability to optimize interest rates in response to both demand and central bank rate hikes. By leveraging the right GIC software, financial institutions can effortlessly increase sales of fixed-term deposits and ultimately gain access to a secure, stable, and reliable source of funding to support their lending activities. 

While the most basic GIC software solutions can help eliminate time-consuming manual processes and reduce errors associated with data-entry, the best GIC software solutions provide a platform for banks and financial institutions to leverage automation technology, customize products, and raise hundreds of millions of dollars’ worth of GICs and fixed-term deposits in just a matter of months—sometimes even a matter of weeks. Through integrations with financial networks and automation, the best solutions can provide banks and financial institutions with streamlined access to billions of dollars in funding every year.

So, what are the five best GIC software features banks and financial institution leaders should look for when replacing or considering a new GIC or term deposit system?

The best GIC software software systems automate GIC processing, integrate with other core banking systems and industry partners, connect financial institutions with the industry’s vibrant deposit broker network, and provide valuable product customization features that allow banks to tailor GIC product types and create a wide range of GIC investment opportunities for consumers. In addition, they also provide regulatory compliance and reporting features to ensure that financial institutions remain compliant with industry regulatory requirements. 

For banks and financial institutions, here are the five best GIC software features that will help make selling, processing, and managing GICs easier and more efficient: 

• Automated GIC Processing 

• Integration with Existing Core Banking Systems 

• Connection to the GIC and Term Deposit Broker Network 

• GIC Product Customization 

• Regulatory Compliance  

This post will explain what GIC software is, and it will discuss each of these features so you can better understand how they provide a comprehensive technological foundation for banks and financial institutions offering term deposits and GICs to support their lending activities.

What is GIC Software?  

GIC software, sometimes called a GIC system or term deposit system, is a core banking application used by chartered banks, credit unions, and other financial institutions that provides the ability to create, manage, and automate the processing of guaranteed investment certificates or GICs and fixed-term deposit investment products. The financial technology is often integrated as part of a wider core banking system that includes lending and mortgage software, retail banking software, client management technology, as well as credit processing, accounting, general ledger functionality, and reporting. 

GICs and fixed-term deposits are important products for Canadian financial institutions because they can provide a predictable source of funding that can be used to offer mortgages and other lending products. GICs and term deposits also play a critical role in a financial institution’s ability to forecast cashflow and manage liquidity risk. 

While GIC software can be included as part of a larger core banking system, it can also be deployed as a standalone software solution that integrates with a bank or financial institution’s pre-existing systems. 

The 5 Best GIC Software Features

1. Automated GIC Processing 

One of the most valuable features of any GIC software system is automated GIC processing capabilities—that’s its ability to automate and streamline the processing of GICs. This includes the automatic processing of the otherwise time-consuming, manual processes involved with managing these types of investment products, like opening new accounts, processing transactions, renewing expiring deposits, calculating interest rates and agent commissions, and rolling over GICs and deposits that have reached maturity. These systems will handle all of these automated processes, and they will do it in bulk, too, allowing financial institutions to process transactions and manage a large number of GICs and term deposits simultaneously. 

These automated processing features streamline the GIC sales process, while also reducing errors and improving efficiencies by removing the administrative burden of managing these types of investments manually. Automated GIC processing is often the most important feature for banks and financial institutions that are considering a new GIC software solution.   

2. Integration with Existing Core Banking Systems

Since GIC software is an important component of a core banking system, its ability to integrate with a bank or financial institution’s existing core banking systems is often crucial in ensuring that customer data can be shared safely and securely between systems. This integration not only eliminates the potential for delays, errors, and inaccurate data caused by manual data entry, but it can help improve customer service by providing a more complete view of customer’s financial health, allowing banks to view customer deposit product information alongside other core banking products, including retail banking accounts, credit facilities, and mortgage and lending products. Integration with online banking and mobile banking applications will also ensure customers can view and manage their GIC investments at any time. 

3. Connection to the GIC and Term Deposit Broker Network 

Automated GIC processing and core banking integration features are most valuable when financial institutions can attract customer deposits on a massive scale. That’s why one of the best features of a GIC system is its ability connect to Canada’s GIC and term deposit broker network.

By connecting to the GIC and deposit broker network through integrations with third-party systems, like the CANNEX financial network, banks and financial institutions can extend their deposit business to a much larger market and offer nominee name deposit. This not only allows financial institutions to scale their deposit business, but it also helps diversify their funding sources and effectively shifts timely customer relationship management activities to deposit broker professionals that specialize in personalized financial services. 

4. GIC Product Customization

While automation, integration, and the ability to access a large market are some of the most important GIC software features for banks and financial institutions, in order to leverage the true value of these features it’s equally important to ensure that GIC investment products are designed for a wide range of investors. Offering flexibility between things like term lengths and interest rate calculations, GIC product customization allows financial institutions to offer many different types of GICs and term deposits.

Effective GIC product customization features will allow banks to customize term lengths and interest rate calculations to create countless product options ranging from less than one year to ten years. In addition to non-redeemable, redeemable, and cashable deposit product options, GIC product customization features should allow banks and financial institutions to create the following GIC product types: 

• Fixed-rate GICs
• Adjustable-rate GICs
• Step-rate GICs
• Market-linked GICs
• Registered GICs 
• Non-registered GICs
• Foreign Exchange GICs

5. Regulatory Compliance

Features designed to streamline the GIC sales process are valuable for promoting and scaling business for GIC deposits issuers, but chartered banks and financial institutions accepting deposits from the public must also ensure their GIC software includes comprehensive regulatory compliance and security features. 

Data encryption technology, system monitoring and alerting, user access controls, detailed auditing functionality, and customized reporting capabilities can all help financial institutions maintain compliance with industry regulators. 

Since all chartered banks and financial institutions that accept deposits from the public are required to be a member of the Canada Deposit Insurance Corporation (CDIC), a Crown corporation that provides deposit insurance to member institutions, GIC software used by chartered banks and financial institutions must also provide a way to meet the CDIC’s Fast Insurance Determination data and system requirements. This process ensures that in the unlikely event of a bank failure, CDIC can immediately step in and take control of a financial institution’s data. Within hours CDIC must be able to connect to financial institution’s system, access its deposit and liability information, and load it into the CDIC’s payout application. GIC software must include functionality to streamline this process. 

The Best GIC Software Improves Efficiencies and Is Essential to Banks and Financial Institutions

While every financial institution is different, chartered banks and financial institutions can streamline their GIC and deposit business and gain access to a secure, stable, and reliable source of funding by implementing a term deposit solution that includes these 5 best GIC software features: automated GIC processing, integration with existing core banking systems, the ability to connect to the GIC and term deposit broker network, GIC product customization features, and regulatory compliance functionality. 

These features collectively provide a solid platform for banks to take advantage of valuable automation efficiencies and respond to dramatic increases in product demand, like the recent resurgence of GICs that’s been driven by a complex mix of economic factors, like elevated levels of inflation, central bank rate hikes, and ongoing economic uncertainty.  

Although the right GIC software can provide the ability to quickly respond to unusual or unpredictable increases in demand with minimal resources, it’s also simply a fundamental system that the banking industry has relied on for years. GIC software is essential to banks and financial institutions.  

If you’re interested in learning more about Portfolio+ or how Portfolio+ GIC software can help make your financial institution’s deposit business more efficient, contact us today. 

Sources: 

https://www.bankofcanada.ca/rates/banking-and-financial-statistics/chartered-bank-selected-liabilities-month-end-formerly-c2/ (Retrieved February 17, 2023)