A recent study conducted by 10x Banking has highlighted the significant challenges facing banks in their pursuit of digital transformation, with legacy core banking systems identified as a primary hindrance. The report, titled "Core Banking without Compromise," surveyed over 200 senior IT decision-makers and revealed that 55 per cent of banks view their current core systems as major obstacles to achieving their digital transformation goals.

The research underscores the critical dependency on modernising core banking infrastructures, as 93 per cent of respondents believe their future success hinges on selecting the correct core banking solution. Despite this recognition, the study shows that the fear of migration risks is preventing 69 per cent of banks from adopting next-generation solutions.

Key findings from the survey include the following:

  • 53 per cent of banks using legacy systems are experiencing challenges in scaling, primarily due to data silos and production bottlenecks.
  • 42 per cent of banks plan to replace components of their legacy core technology within the next year.
  • Merely two per cent of banks have no plans to update their current systems.
  • Integration of artificial intelligence (AI) is a priority for 39 per cent of the banks, with plans to incorporate AI technologies within the next year.

While cloud-native solutions were initially perceived as a panacea for the constraints of legacy systems, many banks are still encountering difficulties in achieving the desired rate of digital transformation.

Antony Jenkins, CEO of 10x Banking, elaborated on these frustrations, indicating that limitations with both legacy and newer solutions continue to limit progress. “While there are more core solutions available than a decade ago, this research shows that limitations and compromises remain—and they are frustrating both the business-as-usual operations and long-term transformation activities of banks. With the rapid advance of AI and changing customer expectations, the core challenges facing banks could quickly escalate from frustrations to business-critical risks," Jenkins stated.

To address these persistent challenges, 10x Banking has introduced what it describes as the world's first 'meta core' – a cloud-native, modern platform designed to facilitate banks' transformation journeys while mitigating the risks, costs, and compromises typically associated with such projects. This new platform aims to enable banks to innovate and provide personalised services tailored to evolving customer needs without the usual constraints of legacy and neo core solutions.

The survey results underline a pressing need for banks to modernise their core banking systems to keep pace with technological advancements and customer expectations. As the landscape of banking continues to evolve, the industry is closely watching how solutions like 10x Banking's meta core will impact the ongoing digital transformation initiatives.

Source: Noah Wire Services