The legacy systems that large financial institutions often rely on have left them marooned in technological quicksand. 80% of top bank executives believe that if they do not upgrade their technology to be more flexible and capable of supporting rapid innovation, the very existence of their company may be in jeopardy. With cloud-native core banking platforms, banks can personalise their services at scale as well as rapidly design, test, and deliver engaging experiences to customers.

Incumbents across the globe are waking up to this notion of evolving dynamics as constant technological disruptions call into question even the most current plans to modernise systems. FinTechs have an opportunity to address this situation as they are unencumbered by legacy technologies in their quest to target segments that are underserved by traditional banks. Across multiple regions, FinTechs are actively leveraging cloud-native core banking systems to build propositions for niche market segments.

In an effort to transform customer experience delivery, business continuity, operational efficiencies and resilience, both traditional banks and new-age FinTech startups have partnered with technology providers like Mambu, Temenos, Finastra, and Thought Machine. Rapid digital transformation, fuelled by strategic collaborations, has helped financial institutions and FinTechs unveil customer-centric solutions, including mobile apps and chatbots.

The rise of open banking is also driving legacy modernisation efforts in the financial sector, allowing banks to reimagine their back office technology systems to allow API-based access to customer data to third-party providers in a secure and compliant manner. Open banking startups like Salt Edge and Trade Ledger have carefully curated strategic partnerships with core banking providers in an attempt to deliver the perfect amalgamation of innovative and modern infrastructure solutions.

The modernisation of financial institutions is no longer a question of if but when. Different players will have diverse interpretations of transformation, and it will continue to be a moving target in the coming years. The digital evolution process, driven by cloud-native core banking, is enabling banks to better align themselves with shifting consumer preferences and market paradigms. With innovation at its core, 2023 seems to be an exciting year for the financial sector to build, collaborate, and innovate on modern infrastructure.