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Core banking is a set of services provided by a group of networked bank branches. Bank customers may access their funds and perform other simple transactions from any of the member branch offices. The major issue in core banking is the authenticity of the customer. Due to unavoidable hacking of the databases on the internet, it is always quite difficult to trust the information on the internet. To solve this problem of authentication, we are proposing an algorithm based on image processing, improved steganography and visual cryptography. This paper proposes a technique of encode the password of a customer by improved Steganography, most of the steganographic techniques use either three or four adjacent pixels around a target pixel whereas the proposed technique is able to utilize at most all eight adjacent neighbors so that imperceptibility value grows bigger and then dividing it into shares. Total number of shares to be created is depending on the scheme chosen by the bank. When two shares are created, one is stored in the Bank database and the other is kept by the customer. The customer has to present the share during all of his transactions. This share is stacked with the first share to get the original image. Then decoding method is used to take the hidden password on acceptance or rejection of the output and authenticate the customer.