Banks face some big challenges in the year ahead, according to American Banker, which listed ways technology will change banking in 2019. Some of the steps look pretty basic, which may reflect on the problems with legacy systems, and suggests some of the advantages new banks could enjoy with new technology.

“The largest banks are automating work anywhere they can, especially routine work like cutting and pasting data from one app to another,” says the Banker. This results from old siloed systems; estimates are that banks spend 80-plus percent of their IT budgets on maintenance.

As Celent says, “Banks recognize that they have to innovate. But often the very reason that they have to innovate — their back office technology — is also what limits their ability to innovate.”

For that reason, more bank-fintech partnerships may be on the horizon, says John Mitchell, CEO of Episode Six, a payments software technology provider.

“Banks are realizing that collaboration will lead to more customers and more profits,” he says. “Internally they face challenges keeping up with digital innovation to effectively meet consumer demand, but with fintechs, banks can innovate faster and more efficiently develop new products and services.”

Real-time payments is another area to keep an eye on going forward. The Clearing House, owned by 24 large banks, has developed its own system for real-time payments, a real-time gross settlement (RTGS) system. Meanwhile, the Federal Reserve is exploring whether it should develop its own RTGS system. The big banks are opposed, but smaller banks and merchants want the Fed to step in with its own system to provide competition.

We may also see more federal probes of fintechs, perhaps starting with Robin Hood. But that might be too conservative — with Maxine Waters as chair of the House Banking Committee, and perhaps Rep. Alexandria Ocasio-Cortez as a member, it won’t be just fintechs under increased scrutiny.

This article was published as part of Weekly Briefing No. 158