In 2026, the LatAm banking and payments industry should continue to be defined by two competing demands: rapid digital transformation and the need for sustainable, profitable growth. As more financial institutions expand into untapped market segments, launch innovative products, or enter new territories, the functionality of their core systems sits at this tension point. Now more than ever, a bank's digital architecture can make all the difference between efficient scaling and costly disruptions.

Key Findings:

• 75% of Latin American tech leaders believe legacy systems limit their product and service offerings, acting as a hidden barrier to digital transformation.

• The future industry could increasingly be defined by the tension between the need for rapid digital transformation and the demand for sustainable, profitable growth.

• Legacy systems can result in High TCO (Total Cost of Ownership), Vendor Dependence (lock-in), and slow responses to market changes.

• Modularity allows adding new services in a matter of configuration rather than months of complex development, enabling Accelerated TTM and faster growth.

• This approach can also lower TCO by reducing the need for expensive, custom development and maximizes ROI by ensuring investments are productive immediately.

• Banks could adapt quickly to new regulatory or policy changes by updating only the affected modules, reducing operational and compliance risk.

Overcoming the Hidden Legacy Barrier

For a growing bank, legacy infrastructure can act like an invisible barrier, making every upgrade slower and harder to direct. This rigidity could lead to critical pain points:

• Roadblock to Transformation: 75% of Latin American tech leaders believe legacy systems limit their product and service offerings.

• High TCO (Total Cost of Ownership): Maintaining monolithic, outdated systems can consume budgets that could be funding innovation and expansion.

• Vendor Dependence: Relying on proprietary systems could mean vendor lock-in, and banks left with slow responses to market demands.

For Latin American financial institutions in 2026, the continued acceleration of digital payments means they need a financial architecture built for speed and flexibility, not stability alone. Because it isn’t just fintechs that can launch new products or enter new markets at speed. In 2025, Galileo has helped some of the region’s most established banks launch next-generation digital offerings. And this trend looks set to pick up pace in the months to come.

What is True Modularity, and How is it Scalable?

True modularity can make scaling easier. It’s the separation of core banking functions into independent, loosely-coupled services. Institutions often find it easier to add or update specific features and functionalities without affecting the broader system.

The Modular Advantage – This approach provides the infrastructure that can answer three core needs for LatAm banks in 2026:

• Agility: The ability to add new services via configuration, not deep-core coding. This can enable banks to quickly target new customer segments, no matter their location or preferred payment style.

• Reliability: By isolating features, the core ledger stays rock-solid. This should result in high availability and stability, even as digital capabilities evolve rapidly.

• Scalability: The system supports horizontal scaling. Banks can add capacity to specific high-volume services (like digital payments) exactly when they need it. Even during seasonal peaks such as Black Friday, performance should stay high.

How Does Modularity Support Innovation and Reduce Time To Market?

The flexibility of modular banking ensures institutions can grow at their own pace without ever disrupting mission-critical core operations.

• Non-Disruptive Updates: By isolating new features into configurable modules, it aims to preserve stability. The IT team can focus on innovation instead of firefighting.

• Speed is Configuration: The true power shows up on the ground. Instead of months of complex development, adding a new service should be a straightforward matter of configuration.

  • Want to introduce a specialized digital savings tool like Buy Now Pay Later for a new demographic? It’s as simple as configuring the right module.

  • Need to integrate quickly with a popular regional e-wallet or payment network to capture market share? The API-first modular framework makes it simple to connect.

• Accelerated Time To Market: This capability can give banks a clear advantage in a region demanding speed. Banks execute strategic pivots without the typical IT delays. The result? Faster growth.

What is the True ROI of Modular Infrastructure?

In Latin America, rapid innovation must be cost-effective first. Modular banking can support sustainable growth by aiming to dramatically lower the Total Cost of Ownership (TCO) and maximize Return on Investment (ROI).

Sustainable Growth and Smart Spend:

• Lower Development Costs: By eliminating the need for custom, deep-core development for every new feature, modularity should keep development costs in check.

• Maximized ROI: Add new features and integrations exactly when and where they’re needed. Investments promise to be productive immediately. And banks often see real returns, fast.

• Risk Mitigation: Modularity lets banks react quickly to new regulatory environments or unexpected policy changes — a vital strategy when expanding into new LatAm markets. Banks update only the affected processes or modules, which should reduce operational risk and compliance burden.

What is the Long-Term Strategic View for Future-Proofing a LatAm Bank's Core?

If a bank’s growth strategy is limited by the rigidity of its current technology, it might be time to rethink infrastructure. Choosing a modular, agile architecture can translate into an investment in continuous innovation.

Whatever the next market opening (like the intensifying development of Open Finance or the growing cross-border payment sector), LatAm banks should consider infrastructure that is ready to adapt — with stability, agility, and delivering value for all.

Galileo's Cyberbank Digital platform was built on 20+ years of experience across 13 countries in the Americas to provide the precise agility and scale required.

Our platform embodies the three core necessities detailed above: Agility, Reliability, and Scalability. It is the proven foundation that allows established institutions to compete with fintech speed without compromising their core operations.

Frequently Asked Questions (FAQs)

What is the main competitive advantage of a modular core banking system in LatAm?

The main competitive advantage is the ability to achieve Agility and Speed (TTM) by adding new features through configuration rather than complex deep-core development. This can enable banks to rapidly compete with nimble fintechs and respond to new payment systems like PIX.

How does modularity address the problem of high TCO for legacy banks?

Modularity addresses high TCO by eliminating the need for expensive, custom development for every update. It can reduce costs associated with maintaining outdated, monolithic systems, allowing resources to be reallocated from maintenance to innovation.

How does Cyberbank Digital's architecture promote resilience and stability?

Cyberbank Digital is designed for Reliability and stability by ensuring components are loosely-coupled. Any update or failure in one non-critical module doesn't affect the stability of the core ledger and mission-critical services, guaranteeing high uptime.

What role does modularity play in adapting to new regulatory requirements in Latin America?

Modularity enables banks to comply with new regulations by making changes in isolated modules only. This ensures banks can rapidly adapt to regulatory shifts, like those anticipated for Open Finance in 2026, without risking the stability of the entire system.

What are the three core Galileo Brand Pillars supported by Cyberbank Digital?

The three core pillars are Agility, Reliability, and Scalability. These combine to offer a system that is flexible to change, stable under pressure, and capable of handling massive growth in transaction volumes.

Galileo Financial Technologies, LLC is a technology company, not a bank. Galileo partners with many issuing banks to provide banking services in North and Latin America.