It’s a widely accepted fact that many established financial institutions simply must upgrade their core banking technology to remain competitive with challenger banks and other digital-native fintech upstarts, whose cloud- and API- based tech platforms enable them to quickly build and deploy powerful, personalized, omnichannel banking products. 

But for established FIs, the need to upgrade legacy banking cores isn’t just a matter of keeping up in the technological arms race with this new crop of competitors. Indeed, core modernization is about more than technology alone; it’s about transforming a bank’s entire business model to be more customer-centric, agile and iterative–all of which are fast becoming prerequisites for remaining competitive and relevant as the financial services and banking landscape undergoes a dramatic digital transformation. 

Given the existential stakes involved, established banks must move quickly to act–overcoming the institutional hesitancy that often accompanies the prospect of a banking tech upgrade,  mainly due to concerns over the cost and risk of business disruption stemming from overhauling such a crucial component of day-to-day operations. 

3 Ways Banks Can Overcome the Tech Modernization Hurdle

To surmount that inertia and achieve organizational alignment around investing in digital banking, it’s crucial that the case for such a project not be limited to the technology itself, but rather focuses also on the business benefits and critical long-term transformation such an investment can enable. 

How modern banking tech drives revenue and engagement

A major challenge in modernizing core banking systems is bridging the gap between technical teams, who concentrate on risk mitigation and cost management, and business teams, who focus on growth and new opportunities. To address this, banks need to align key performance indicators (KPIs) across both groups, recognizing that while each faces unique challenges, they share a common underlying goal.

When setting KPIs, stakeholders should consider not only short-term financial returns but also the broader transformative benefits of modernization. This includes cost savings, faster product launches, improved customer experiences, and new revenue opportunities. By embracing modernization, banks can replace traditional manual compliance processes with automated controls and rapidly introduce high-value services like real-time payments and buy now, pay later (BNPL) options.

Further, modern core banking platforms, such as Galileo’s Cyberbank Digital, enable FIs to define customer journeys and user experiences according to customer needs. They offer robust capabilities that span account management, transactions, payments and bill pay and can enable new and existing bank customers to easily and quickly self-enroll into an FI’s digital banking channels.

How to Start Your Journey Toward Core Banking Modernization

Meanwhile, conversational AI-powered capabilities supercharge user engagement and satisfaction by providing proactive, personalized and integrated customer service and assistance. Additional benefits include simplified configuration, enhancement and extension of services and a modular, microservices-based architecture that allows banks to integrate into new or existing platforms, systems and third-party service providers via APIs.

Given the transformative potential of these and other modern digital capabilities, it’s clear that core banking modernization is not merely a technical upgrade—it’s a critical business strategy that allows banks to stay competitive in a rapidly changing market.

Want to learn more?

Contact us to find out how to future-proof your FI with Galileo’s Cyberbank Digital.