10x Banking report highlights core banking challenges

The report presents insights from over 200 senior IT decision-makers, examining their perspectives on current banking technology infrastructure and the necessary steps for future transformation. 

The study, conducted in June 2024, indicates that banking IT leaders are focused on innovation and scalability. There is widespread acknowledgment that significant transformation of core banking systems is essential, particularly to improve the adoption of cloud-based technologies. However, concerns over the risks associated with these investments are moderating enthusiasm for widespread technological overhaul.

Primary findings of the report

The survey identified several critical challenges: 

• 55% of respondents cited limitations in existing core banking systems as a primary obstacle to achieving digital transformation objectives. 
• 53% reported difficulties in scaling due to data silos and production bottlenecks caused by legacy core systems. 
• A significant majority (93%) acknowledged that the success of their institutions depends on choosing the right core banking technology. 

It’s also worth noting that only 2% of respondents have no plans to replace their current core technologies, while 42% are preparing to update or replace parts of their legacy systems within the next 12 months. 

Despite this push for transformation, 69% of those surveyed noted that migration risks are preventing the adoption of next-generation core banking platforms. Additionally, the integration of artificial intelligence into core systems remains limited, with only 32% of respondents having incorporated AI. However, 39% plan to introduce AI within the next year, and 27% within the next two to five years. 

In August 2024, 10x Banking introduced what it describes as the world’s first ‘meta core’ technology. This new generation of cloud-native core banking platforms is designed to help banks quickly and securely launch new products and services.  

The platform aims to address the challenges identified in the research, offering banks a more scalable and flexible solution without many of the compromises associated with both legacy and neo core systems. 

Commenting on the research, 10x Banking officials noted that while there are more core banking solutions available than in the past, many still present limitations that disrupt business operations and long-term transformation efforts. They added that with the fast-paced development of AI and evolving customer expectations, unresolved core banking issues could soon become critical risks for banks.