Next-Gen Banking Architecture: Technology Foundations for 2030s
Banks are racing to outperform a flood of new competitors, keep up with shifting regulatory requirements, and satisfy rising customer expectations. Yet few have the core technology required to meet those aspirations. Most remain locked in legacy architectures that stifle innovation, shackle agility, and drive up costs.
Nearly half the banking executives polled at a recent Qorus online event believe their organizations will have to overhaul their technology architectures to be competitive in the 2030s. Just 25% are confident they will only have to upgrade their current architectures.
Banks don’t just need to modernize their technology architectures. They need to modernize quickly, says Jan Uriga, Qorus senior advisor and moderator at the online event.
“Institutions are still relying on architecture that was designed for a very different era. There is a growing gap between what the business needs and what the technology can deliver.”
Unless they move quickly, many incumbent banks will be overtaken by more nimble competitors with modern technology platforms that can deliver engaging banking experiences and products at much lower costs.
Hosted by Qorus and Infosys Finacle, the online event examined how banks can transform their technology architectures to compete effectively in the coming decade. Representatives from Infosys Finacle, a leading international banking solutions provider, as well as from the First Bank of Nigeria, Millennium bim in Mozambique and Morocco’s Crédit Agricole du Maroc identified transformation opportunities and challenges.
“Third-party ecosystems are expected to account for more than 70% of customer banking transactions,”
Ravi Venkataratna, senior industry principal at Infosys FinacleRavi Venkataratna, senior industry principal at Infosys Finacle, says the shift in banking transactions towards third-party ecosystems requires banks to move from monolithic batch processing infrastructure to cloud-native real-time transaction environments. Banks can then integrate these scalable cloud environments seamlessly with other ecosystems.
He adds that the global market for embedded finance is forecast to jump from US$100 billion (€85 billion) this year to US$600 billion (€510 billion) by 2030. “That’s a very short time for such transaction growth.”
Venkataratna points to four major trends that will accompany the rapid increase in transaction volumes and steer the transformation of technology architectures.
Advanced AI
Banks will move from experimenting with AI, “AI tourism”, to building applications that generate return on investment. They will roll out predictive, generative and agentic AI applications and move towards what Infosys Finacle terms responsible AI.
“These are applications where humans operate as part of larger AI-related initiatives and ecosystems,”
Ravi Venkataratna, senior industry principal at Infosys Finacle
Tokenized economy
Many countries are already experimenting with stablecoins and Central Bank Digital Currencies (CBDCs) and such initiatives will become increasingly influential.
“Tokenized currencies and assets are going to shape the role of banks not just in centralized finance but also decentralized finance,”
Ravi Venkataratna, Senior Industry Principal at Infosys Finacle
Digital public infrastructure
The rise of digital public infrastructure (DPI) is starting to reshape banking and other industries in many countries. India, for example, first introduced digital identity and payment systems and then quickly implemented comprehensive digital governance structures. DPI in India currently facilitates more than 185 billion annual real-time transactions. Such moves are intended to reduce dependence on foreign technology providers.
“National infrastructure is becoming critical not only from a data perspective, with data privacy and location regulations, but also in terms of sovereignty. Several countries are trying to establish sovereign clouds, sovereign AI, and sovereign cryptography,”
Ravi Venkataratna, Senior Industry Principal at Infosys Finacle
“It’s a misconception to think that such transformation is just about technology. Every aspect of the bank is impacted, right from origination to the middle office, back office and HR,”
Callistus Obetta, group executive technology and digital innovation at First Bank of NigeriaSecurity by design
Rising cybersecurity threats, amplified by advances in AI and the potential power of quantum computing, are forcing banks to rethink their technology architectures. They have already begun to adopt zero-trust architectures but must now advance to self-healing systems, AI-guided cybersecurity, and post-quantum cryptography, says Venkataratna.
“Quantum computing is still a few years away but researchers have already identified threats such as harvest-now-and-decrypt-later. Hackers are harvesting the data now and waiting for quantum computing to arrive so they can then use it to decrypt data. Even though quantum computing is not here yet, it is imperative that banks take steps to protect their data from the impending quantum-related issues,” he says.
Venkataratna adds that many banking regulators are supporting the trends driving technology transformation. The UK Financial Conduct Authority (FCA), for example, is building AI infrastructure such as a digital sandbox for banks to test their applications. The Bank for International Settlements (BIS) has released a quantum readiness roadmap to help banks implement quantum-safe cryptography. The Monetary Authority of Singapore (MAS) has committed S$100 million (€65 million) to fund quantum and AI capabilities in its financial sector.
Callistus Obetta, group executive technology and digital innovation at First Bank of Nigeria, warns that the effects of technology transformation ripple throughout the organization.
“The first challenge in our technology transformation was aligning people to support agile delivery, stopping the silos and getting people working together,”
Sergio Magalhães, executive board member and CTO at Millennium bim in MozambiqueThe Nigerian bank has embarked on an extensive technology transformation to drive growth and increase competitiveness. It is using Infosys Finacle solutions to rebuild its applications and infrastructure and establish a new data platform. The bank is also strengthening its cybersecurity.
“We are beginning to see early signs of success. We are delivering solutions five times faster than six years ago. First Bank now accounts for 20% of the industry’s payments volumes and around 70% of our client transactions happen on third-party platforms,” says Obetta.
Abdeljalil Nafia, head of the IT System Infrastructure Center at Crédit Agricole du Maroc, adds that his bank’s use of AI in its technology architecture transformation has quickened return on investment. The bank is working on more than 20 AI-related applications that include debt collection, credit guarantees and cybersecurity.
“IT and business are now speaking the same language. They are more aligned. There’s still a gap but they’re coming together,”
Abdeljalil Nafia, Crédit Agricole du Maroc, Head of IT System Infrastructure CenterCrédit Agricole du Maroc has further strengthened its resilience by creating a security hub that brings together IT and business specialists.
Sergio Magalhães, executive board member and CTO at Millennium bim in Mozambique, says breaking down silos and aligning employee teams is one of the most underestimated challenges of technology transformation.
Magalhães adds that the bank’s second challenge was putting governance structures in place. After that, it had to ensure the smooth running of parallel teams responsible for either legacy maintenance or agile development.
All three banks have experienced difficulties attracting and retaining the skilled staff needed for technology transformations. Their responses include importing specialist contractors, investing in skills development, and motivating employees by equipping them with advanced technologies.
Banks that successfully navigate their architectural transformations will gain competitive advantages in speed, cost, and customer experience. Those that delay modernization risk being overtaken by more agile competitors using cloud platforms and solutions to quickly deliver innovative banking experiences at lower costs.