Core Banking Architecture

What the interviewer is actually measuring · The seven-step frame, and why order matters · Functional vs non-functional, stated properly · Back-of-envelope: the four numbers to derive · Latency numbers every engineer should know · The vocabulary of tradeoffs · How to draw so the room follows you · Signals of seniority, and of its absence

The prompt, deliberately underspecified · The clarifying questions worth asking · Requirements: functional · Requirements: non-functional, with numbers · Why money is never a float · Balance as a stored column: the naive design · The lost update, demonstrated · Double-entry: the model banks actually use · Balance as derived state · Sketch v1: one service, one database · Why RDBMS here: the guarantees, and how they are kept · What v1 cannot survive

The pressure: concurrent debits · Isolation levels, and what each one permits · Inside MVCC: how the snapshot is built · Pessimistic: SELECT FOR UPDATE and the lock manager · Optimistic: version columns and CAS · Choosing per-operation, not per-system · Deadlocks: how they form, how to order writes · Idempotency keys, and the fingerprint · Exactly-once is a lie; here is the truth · Sketch v2: safe under concurrency

The pressure: the write path saturates · Deriving the real write amplification · Why the hot row is the bottleneck, not the disk · Sharding the ledger: choosing the key · Why account_id and not transaction_id · Cross-shard transfers, and the two-phase trap · Journal-first: append then post · Snapshots and the balance cache · Redis as a read-through cache, and its failure modes · Cache invalidation that cannot go stale · Sketch v3: sharded ledger with derived reads

The pressure: every team wants a hook · Why not synchronous calls to six services · The log as the integration primitive · Kafka internals: partitions, offsets, ISR · Ordering guarantees, and what they cost · Partition key selection for financial events · The dual-write problem, stated precisely · The transactional outbox · CDC as an alternative to the outbox · Consumer groups, lag, and rebalancing storms · Idempotent consumers and the dedup store · Schema evolution with a registry · Sketch v4: event-driven core

The pressure: the balance is no longer one number · Available vs ledger vs cleared balance · Holds and liens as first-class entries · Overdraft as a negative-bound credit line · Loan disbursement as a ledger movement · Amortisation, accrual, and the daily batch · Savings, interest accrual, and rounding rules · Limits: velocity, per-transaction, cumulative · Company accounts, GL mapping, profit tracking · Fees, and where fee revenue is booked · Sketch v5: product engine over one ledger

The pressure: rails you do not control · The connector interface, and why it must be narrow · NIBSS and the Nigerian rails · Paystack and Flutterwave as PSPs · SEPA, IBAN, and European settlement · ACH, wire, RTP in the United States · SWIFT MT103 and correspondent banking · The saga: hold, dispatch, confirm, or compensate · Webhooks: signing, replay, and the poller you still need · Timeouts, retries, and the unknown-state problem · Circuit breakers and provider health · Routing: cost, reliability, and failover · Sketch v6: pluggable rails

The pressure: one ledger, many moneys · Currency as a dimension, not a column · Minor units, exponents, and JPY vs KWD · The zero-sum invariant, restated per currency · FX conversion as two coupled postings · Quote, spread, and the treasury position · Data residency and jurisdictional partitioning · Per-jurisdiction compliance as policy, not code · Sketch v7: currency-aware, region-aware core

The pressure: someone else initiates the debit · The four-party model · Authorisation: the 2-second budget · Stand-in processing and the offline window · Auth holds, partial capture, and expiry · Clearing and settlement files · Debit against a wallet vs credit against a line · Multi-currency cards and DCC · Chargebacks and the dispute ledger · PCI DSS scope, tokenisation, and the HSM · Sketch v8: card authorisation on the money path

The pressure: adversaries, not just load · Rules engine on the synchronous path · Feature stores and the freshness problem · Behavioural baselines per account · Velocity checks in a sliding window · Graph signals: money mules and rings · Scoring: rules, gradient boosting, and LLM triage · Three-tier decisions: allow, review, block · Automated blocking and the blast radius · Account and wallet flagging state machine · Sanctions, PEP, AML transaction monitoring · Case management and the feedback loop · Sketch v9: risk in the path, not beside it

The pressure: drift is silent · The trial balance, continuously · Internal reconciliation: journal vs postings · External reconciliation: statements vs ledger · Matching: exact, fuzzy, and one-to-many · Suspense accounts and the unmatched bucket · Break classification and auto-resolution · Corrections as new entries, never edits · The nostro position and end-of-day close · Sketch v10: reconciliation as a first-class system

The pressure: OLTP is the wrong shape for questions · Why analytics never touches the money path · Bigtable: the wide-column model · Row key design for time-series banking data · Hot tablets, and designing them away · BigQuery: columnar storage and Dremel · Partitioning and clustering for cost control · Streaming inserts vs batch load · The medallion layering, applied to a bank · Regulatory reporting from the warehouse · Sketch v11: serving, storing, and asking

The pressure: 10M notifications, ordered, deduped · Fan-out from the event log · Preference resolution and quiet hours · Per-channel workers and blast radius · Deduplication windows · Provider abstraction and failover · Delivery receipts and the feedback loop · Sketch v12: notification subsystem

The pressure: it is broken and you are asleep · SLI, SLO, error budget for a money path · The four golden signals, and the fifth for banks · Business metrics that page · Distributed tracing across the posting path · Structured logs, correlation, and PII · The runbook, and what makes one useful · Graceful degradation: what to shed first · Kill switches and feature flags on money · Disaster recovery: RTO, RPO, and the drill · Sketch v13: the observable core

The pressure: nine services, one ledger · Choosing a protocol: the honest decision table · TCP, and what it guarantees you already rely on · HTTP/1.1, HTTP/2, and head-of-line blocking · gRPC internals: HTTP/2 streams and protobuf framing · When gRPC is wrong, and REST is right · WebSockets: the balance feed, and backpressure · Server-sent events, and why they often win · UDP, and the two places a bank actually uses it · ISO 8583 and the persistent socket reality of cards · The posting API: one interface, every caller · Loan disbursement, as a ledger call · Loan recovery, sweeps, and partial repayment · Overdraft: how a limit is communicated and enforced · Savings, interest accrual, and scheduled posting · Which transactions may exceed a limit, and who decides · Service decomposition: where the seams go · Service-to-service auth: mTLS, SPIFFE, and scoped tokens · The client SDK, and what belongs inside it · Versioning a money API without breaking anyone · Sketch v14: the integration surface

The pressure: the ledger never forgets · Sizing it: from 10 GB to 400 TB, derived · Indexes: what they cost on the write path · B-tree internals, and why index order matters · Covering indexes and index-only scans · Partitioning: range, list, and hash · Time-based partitioning for a ledger · Hot, warm, cold, frozen: the tiering model · Archiving without breaking the audit trail · Restoring an archived account, end to end · The lake, the warehouse, and the lakehouse · File formats: Parquet, ORC, and why columnar wins · Table formats: Iceberg, Delta, and time travel · Entity resolution: linking a customer across systems · Data contracts between teams · Lineage, and answering “where did this number come from” · Retention, deletion, and the GDPR-versus-ledger conflict · Sketch v15: the data platform

The transferable skeleton · Designing a retail bank, in fifteen minutes · Designing a neobank: Cleva, Grey, and the USD problem · Designing a PSP: Paystack, Flutterwave, Monnify · How a PSP differs from a bank, structurally · Designing a POS network and its offline problem · Designing a lending platform on someone else's ledger · What stays the same in all of them

The pressure: not every account is the same account · KYC tiers: what each tier buys the customer · Account types: personal, business, savings, current · The tier × type matrix, and why it is data · Resolving limits when both apply · Tier upgrades, downgrades, and grandfathering · Business accounts: mandates, signatories, dual control · PND: post-no-debit, and its four varieties · Receiving while restricted: credit-in, debit-out · Auto-debit on credit: the standing sweep instruction · Posting ahead: claims against future credits · Ordering when several claims compete for one credit · Backlog clearing, and why it is not a queue · Restriction precedence: who wins when rules conflict · Support tooling and the four-eyes boundary · Sketch v16: the entitlement layer

The pressure: revenue is not a number in a spreadsheet · A taxonomy of fees in a bank · Fees we charge: pricing, waivers, and tiers · Fees we pay: interchange, scheme, provider, rail · Fee posting: when, and against which account · Recognition: earned now, deferred, or amortised · Pass-through versus absorbed cost · The company chart of accounts, properly · Customer funds versus company funds · Safeguarding, and proving segregation daily · Reconciling user funds: the two-sided check · Reconciling company accounts and internal transfers · Unit economics: profit per transaction, derived · VAT, withholding, and stamp duty on the ledger · Month-end: accruals, provisions, and the P&L · Fee disputes, refunds, and goodwill credits · What finance actually asks for, and why · Sketch v17: the revenue and books layer

Why a banking engineer should know this layer · The journey of one request, layer by layer · TCP: the handshake, and the cost of a round trip · Congestion control, and why slow start matters · TLS: the handshake, and what 1.3 removed · Certificates, chains, and the failures you will meet · HTTP/1.1: the bottlenecks, and the workarounds · HTTP/2: the binary framing layer · Streams, multiplexing, and stream states · HPACK: how headers get compressed · Flow control, and the window nobody tunes · Server push, and why it was abandoned · The HTTP/2 failure modes in production · HTTP/3 and QUIC: reliability above an unordered transport · Connection migration, and the mobile case · Head-of-line blocking, traced through all three versions · Choosing a version, per hop · Debugging the transport layer · What this means for the bank, concretely

The complete architecture, walked end to end · A payment, traced through every component · Every major tradeoff, in one table · What we deliberately did not build · How this generalises beyond banking · Defending it: the twenty hardest questions