Views: 20
Summary – Challenge: break free from the aging banking monolith, eliminate technical debt, and meet Basel III and GDPR requirements while tapping into the ecosystem economy. The approach rests on five pillars: business alignment, business metrics, IT–business governance, maturity assessment and agile culture, and a secure modular architecture to evolve core banking into an open, scalable, resilient platform. Solution: launch a technical and organizational audit, build an evolutionary blueprint, and deploy via incremental sprints to accelerate business value and ensure compliance and interoperability.
Traditional banks face a dilemma: how to break free from aging, siloed infrastructures while remaining compliant with the most stringent regulatory requirements? The accumulation of technical debt and the inability to exchange efficiently with financial partners threaten their competitiveness.
Rather than applying endless patches to monolithic systems, it is essential to rethink the architecture from the ground up to join the ecosystem economy. This article outlines a five-pillar strategic approach— from aligning with the business vision to incremental implementation— to transform core banking into a modular, open, and secure platform.
Align Modernization with Business Vision
Modernizing the technology core must be driven by clear business objectives aligned with the bank’s overall strategy. An IT foundation redesigned without reference to customer value and competitive stakes delivers neither agility nor return on investment.
Understand Business and Financial Stakes
The first step is to map critical processes precisely: payments, account management, customer service. By identifying bottlenecks and high-value areas, the bank can prioritize which elements to overhaul first. This analysis often reveals that certain internal monolithic systems impose heavy burdens on performance and user experience.
A strict alignment between the CIO’s office and executive management ensures that every technical change is accompanied by business metrics (processing time, cost per transaction, satisfaction rate). Rather than measuring only IT tickets, the focus shifts to customer lifecycle impact and the ability to launch new offerings.
This shared vision creates a common language that streamlines decision-making and team mobilization during refactoring projects. It positions IT not just as a service provider, but as a strategic partner responsible for delivering the expected business outcomes.
Define Measurable Objectives
Clear indicators—latency reduction, maintenance cost, error rate—allow ongoing tracking of technical debt and the effectiveness of fixes. Without these metrics, any modernization initiative remains vague and often fails to demonstrate its value.
Integrating shared dashboards between business units and IT fosters transparency: the executive committee tracks progress in real time, adjusts priorities, and approves budgetary decisions. This governance ensures continuous funding and avoids project stoppages due to insufficient returns on investment.
By setting quantitative milestones and success criteria at each phase, the bank transforms modernization into a traceable, continuously optimizable program rather than a series of siloed IT undertakings.
Structure IT-Business Governance
Establishing an interdisciplinary steering committee—comprising IT leadership, business heads, and compliance—validates the roadmap, monitors risks, and secures stakeholder buy-in. This cross-functional body is a lever for smoother arbitration.
Clear roles—executive sponsor, business product owner, technical architect—ensure that every decision is made at the appropriate level, with both strategic and operational perspectives. Responsibility for choices and deliverables is thus shared.
This governance model reinforces agility: decisions are made continuously, budgets are adjusted based on delivered value, and obstacles are rapidly removed, maintaining a stable trajectory toward a revamped banking core.
Concrete Example
A regional bank redefined its modernization by aligning each IT project with precise business objectives, such as reducing account opening time from 72 to 24 hours. This approach prioritized refactoring the workflow engine, demonstrating that business alignment accelerates delivery and cuts maintenance costs by 30%. The example highlights the importance of unified governance in steering transformation.
Measure Change Readiness
Launching a transformation without assessing skills, culture, and regulatory constraints exposes the bank to significant delays and cost overruns. A preliminary diagnostic of organizational and technical maturity is essential for the success of any architectural overhaul.
Assess Internal Skills
Identify missing key skills—microservices, API management, cloud-native—and compare current capabilities with future needs. This mapping informs training, recruitment, or engagement of specialized external partners.
A skills-gap study, conducted through interviews and hands-on workshops, often reveals proprietary monoliths that hinder adaptability. The results guide skill development and the formation of multidisciplinary teams capable of driving the new architecture.
Expertise is built gradually, integrating agile coaching and targeted training on open source technologies to ensure sustainable knowledge transfer and avoid dependency on a single provider.
Gauge Culture and Mindset
The ability to experiment, “fail fast,” and “learn fast” depends on open management attitudes and a measured tolerance for failure. A cultural audit must identify psychological barriers (fear of mistakes, disciplinary silos, lack of feedback).
Internal surveys and workshops shed light on work habits. Over-formalized processes can mask a lack of collaboration and slow decision-making. Understanding these dynamics helps design a targeted change management program.
Promoting agile rituals—retrospectives, daily stand-ups, regular demos—cultivates a culture of continuous improvement. Teams adopt new practices, strengthening autonomy and accountability.
Map Legal and Regulatory Constraints
The banking sector is governed by strict standards (Basel III, GDPR). Any overhaul must integrate these requirements from the outset to avoid costly non-compliance. A constraint mapping exercise identifies areas requiring high availability and enhanced encryption.
Legal and compliance teams work closely with architects to define audit, traceability, and reporting mechanisms. This upstream integration guarantees that new modules meet regulatory controls as soon as they enter testing.
This balance sometimes necessitates choosing certified open source solutions or approved connectors for interbank exchanges, ensuring a risk-free redesign without sanctions or redeployment mandates.
Concrete Example
A large pension fund conducted a microservices skills and agile culture audit before launching its refactoring. The diagnostic revealed insufficient maturity in API management. In response, a dedicated training program and partnership with an open source community closed the gaps. This example underscores the importance of preparing the organization before embarking on modernization.
Edana: strategic digital partner in Switzerland
We support companies and organizations in their digital transformation
Evaluate and Rethink Architecture for Interoperability and Security
Shifting from a rigid monolith to a modular, distributed architecture is essential to play an active role in the financial ecosystem economy. Security and compliance must be built-in to ensure partner and regulator trust.
Analyze the Existing Architecture
An in-depth technical audit maps existing components: databases, middleware, external interfaces. This phase identifies tight coupling points and proprietary dependencies that hinder evolution.
Performance analysis uncovers latency bottlenecks and contention areas. A resilience study highlights critical failure scenarios and the redundancy level of essential services.
These diagnostics lay the foundation for deciding whether to refactor, split, or replace modules—favoring open source, flexible, modular solutions while avoiding vendor lock-in risks.
Design a Modular, Interoperable Architecture
Segmenting into autonomous microservices simplifies scaling, maintenance, and integration of third-party services (instant payments, account aggregation). Each service exposes standardized, secure RESTful or event-driven APIs.
A central event bus (Kafka, RabbitMQ) ensures asynchronous communication and decouples components, reducing downtime and improving overall resilience. Services can be deployed and updated independently.
A hybrid approach that combines open source building blocks with custom developments provides the flexibility to meet specific needs without locking the entire platform into a single solution.
Secure Exchanges and Ensure Compliance
End-to-end encryption, strong authentication (mTLS, OAuth 2.0), and continuous monitoring via SIEM tools protect sensitive data. APIs undergo automated security testing at each deployment.
Implementing a unified identity and access management (IAM) framework enables granular control of permissions, interaction tracing, and compliance with KYC and AML requirements. Audits become faster and less intrusive.
Such a secure, compliant architecture becomes a competitive asset, enabling the bank to establish partnerships and exchange financial services in an open ecosystem while controlling risks.
Concrete Example
A mid-sized e-commerce platform broke its monolith into eight microservices, each deployed in a Kubernetes cluster. Switching to event-driven communication cut interbank transaction processing time by 40%. The example demonstrates how modular architecture accelerates responsiveness and strengthens exchange security.
Develop a Blueprint and Deploy Incrementally
A modular blueprint and an incremental roadmap enable rapid hypothesis testing and real-time adjustment of technical choices. Progressive implementation, paired with proactive communication, reduces cascading risks and maximizes value delivery at each stage.
Build a Modular Blueprint
The blueprint documents all software components, interfaces, and data schemas. It formalizes service interactions and defines coding, API, and security standards. This living document serves as the reference for all development work.
Each component is described by its responsibilities, dependencies, and non-functional requirements (scalability, resilience, compliance). The blueprint eases the integration of new open source or custom modules without disrupting the ecosystem.
Modularity ensures that each service can be versioned independently while adhering to stable, documented API contracts—minimizing the domino effect of technical changes.
Define an Incremental “Fail Fast / Learn Fast” Roadmap
The roadmap breaks the project into short increments, delivering priority features in a matter of weeks. Rapid feedback validates or corrects choices before committing to heavier adaptations.
Each sprint ends with a stakeholder demo, providing direct feedback on business value. This approach reduces waste and continually aligns IT with business objectives.
The “fail fast / learn fast” principle encourages experimentation: small prototypes are deployed in test environments to validate technical feasibility and business adoption before any production rollout.
Implement Progressively and Communicate
Deployments are no-impact for end users thanks to feature toggles and dark-launch techniques. Each new service integrates alongside the existing one before being switched over gradually.
Regular communication with business teams—through progress updates and demos—builds buy-in and anticipates chain-reaction effects. Incidents are handled within an agile cycle, limiting their scope.
Prioritizing deliveries by business value captures quick wins—cost reductions or experience improvements—that fund program continuity and reinforce confidence in the transformation direction.
Transform Your Banking Infrastructure into an Ecosystem Engine
The transition to a modular, interoperable, and secure architecture relies on a structured approach: align modernization with business vision, assess change readiness, rethink architecture, build an evolving blueprint, and deploy incrementally. These steps ensure continuous adaptation, optimized time-to-market, and regulatory compliance.
Our experts are ready to guide you through this transformation, bringing contextual expertise focused on open source, performance, and security. Together, let’s create the agile technology core that will make you an active player in the financial ecosystem economy.
