Many believe that humanity’s survival depends on our ability to get 'off planet' and find other habitable planets to colonise. Astronomers scan the universe, searching for signs of planets in the so-called 'Goldilocks Zone' where conditions are not too hot, not too cold, and where we could – interstellar travel permitting – conceivably thrive.
Like humanity, banking’s long-term future is by no means secure. The industry still wrestles with seemingly intractable core challenges – inflexible mainframe legacy technology, configuration neo cores that are challenging to scale, and framework cores that are challenging to build and manage. While banks struggle to meet their goals because of these core compromises, the clock is ticking. AI is advancing at near-light speed, creating tremendous opportunities for banks while, at the same time, presenting existential risks.
To survive amidst so much change and in a challenging environment, the banking industry needs to find its own Goldilocks Zone – a next-generation cloud-native core solution that is easy to build with and easy to scale, and at the same time reduces the complexity, cost, and risk of migration.
10x Banking recently commissioned independent research into over 200 senior IT decision-makers in banking and financial services. 93% of our respondents agreed that their choice of core technology is critical to their future success.
While there is much greater diversity of core solutions than were available a decade ago, the research shows that limitations and compromises remain. Over half (55%) of IT decision-makers we surveyed cited the limitations of their existing core solutions as one of the biggest roadblocks to the achievement of their business goals.
Despite adopting neo-core solutions, many banks remain fundamentally tethered to their legacy IT systems – mainframe cores that have been the backbone of their operations for decades but are now an inflexible barrier to innovation.
The first attempt to break free from these constraints came with the introduction of cloud-native technologies and neo-core solutions a decade ago. These new core banking systems promised to unlock accelerated innovation by enabling banks to migrate to the cloud, and rapidly respond to evolving customer expectations.
However, the adoption of neo-core systems has proved to be sub-optimum. Banks have largely been limited to 'side-car' innovation – launching single cloud-native products here and there while still needing to retain and maintain their legacy mainframe cores.
At the root of banking’s dilemma is that, despite more cloud-native core options being available in the market, each choice demands that the bank make significant compromises.
Neo core platforms, for example, can largely be classified into two categories – framework neo cores and configuration neo cores. This binary choice of neo core has created a fork in the transformation roadmap where banks have had to choose between either:
Banks that want to build and launch innovative products quickly and deliver to the market at scale without incurring outsized costs and risk have had no choice but to compromise when it comes to their core solution. These core compromises can rapidly turn into frustrations – even business-critical risks – especially when it comes to the integration of new technology.
Our research into IT decision-makers in banks and financial services found that the number one challenge banks face with their core technology is integrating key technology with their core solution. For example, while our research shows that AI remains front-of-mind and a leading driver of banks’ transformation plans, only one in three (32%) of respondents have so far integrated AI into their core solution.
Finding the Goldilocks Zone for banking requires next-generation core technology. A core that blends the customisation and scalability of framework neo cores with the accelerated innovation and time to market of configuration neo cores, while derisking migration by enabling co-existence with legacy systems. We call this next generation of core banking technology the ‘meta core’.
For banks to achieve full transformation and ensure long-term survival, a step-by-step approach is essential. The meta core offers a roadmap that derisks the transformation process while delivering the customisation and innovation required for success. By transitioning operations and products to the meta core, banks can reduce their reliance on legacy systems, lower costs, and improve customer experiences – all while maintaining stability and continuity.
The meta core allows banks to take the 'giant leap' that’s essential for their progress. It is a next-gen evolution of core technology that allows banks to keep pace with innovation in an AI-accelerated landscape. Just as the Goldilocks Zone is crucial for sustaining life in the universe, the meta core is crucial for sustaining innovation in banking.
As Chief Revenue officer, Matt leads the commercial team at 10x Banking. Matt Mills is a senior commercial leader within Financial Services technology with expertise spanning next generation AI and automation, behavioural analytics, and augmented reality platforms that enable financial institutions (FIs) to tackle fraud, churn, security, and improve customer insight and user experience. Before joining 10x, Matt led the commercial team at FeatureSpace, one of the fastest growing, progressive fraud management technology companies in Europe supporting the fintech industry in managing fraud across the payment’s ecosystem. Matt has a degree in Computer Science and Software Engineering from Durham University and lives in London, UK.
10x Banking is a cloud-native core banking platform designed for financial institutions and their partners. Founded by former banking executives and built by technologists, the 10x platform offers unparalleled security, scalability, and speed. The company’s unique 'meta core' approach provides financial institutions with the fastest, most cost-effective path to cloud-native transformation.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now