Modern banking starts with mindset before tech
/
Ritesh Rihani is vice president of global enterprise banking at Galileo Financial Technologies.
At first glance, today’s banks appear digitally advanced with sleek apps, feature-rich platforms, and round-the-clock chatbot support. But behind the scenes, many still run on decades-old infrastructure built for a different era.
Despite massive investments in digital transformation, a persistent gap between operational stability and forward-looking innovation continues to stall progress. The numbers tell the story: More than 60% of overall tech spend in banking is allocated to maintaining existing systems, diverting critical resources away from innovation and transformation efforts. The problem isn’t just aging technology — it’s outdated thinking.
The real barrier: mindset, not mainframes
Banks have layered new features over legacy systems, creating a two-speed world: flashy customer experiences up front, but slow, outdated systems behind. The real barrier is the misalignment between 'run-the-bank' — the technical and operational mindset — and 'build-the-bank' —t he revenue and growth mindset. An inability to align on priorities leaves many banks feeling stuck.
Banking technologists tend to concentrate on managing costs, mitigating risks and ensuring seamless system integration. The business side prioritizes growth, seizing new opportunities, and driving efficiency. As a result, opportunities to enhance the customer experience often stall.
It’s time for a mindset shift that bridges operational and growth priorities. When bank leaders connect these perspectives, they create the formula needed to accelerate digital and core banking investments.
The trap of today’s questions
Bank leaders know modernization is urgent and invest millions in digital interfaces and payment upgrades. But for core systems, the focus drifts to familiar questions: What database are we on? Can we document legacy systems? Do we have the staff to keep things running?
These “today” questions are safe but limiting. By focusing solely on infrastructure, banks miss the bigger picture, patching systems and layering middleware, hoping incremental upgrades suffice. Meanwhile, fintechs and digital-native banks race ahead, serving more customers by delivering value in every micro-moment.
The cost of standing still
Maintaining the status quo is costly. IDC estimates outdated technology will cost banks $57.1 billion by 2028. There are hidden costs: missed growth, lost revenue and fading relevance. Compliance pressures, investor scrutiny, and rising consumer expectations have made real-time performance and hyper-personalization non-negotiable. Banks that wait for the perfect moment to modernize will lose out to those willing to start small and move fast.
Flip the script: Ask tomorrow’s questions
It’s time to shift from asking, “How do we make our systems work?” to “How do we make banking work for people?” The future belongs to those who prioritize outcomes over operations.
Imagine if, instead of focusing on hardware and databases, banks asked questions like:
How can we anticipate and meet customer needs in real time?
How do we create meaningful relationships through every digital interaction?
How can we become an invisible, supportive presence in our customers’ financial lives?
What does a truly customer-centric, always-on bank look like?
These are the questions that drive transformation — not just incremental change.
The composable approach: Modernization without disruption
The new playbook is composable and modular. A digital sidecar core — essentially a modern, cloud-native platform — runs alongside existing systems, letting banks innovate while keeping the lights on. Think of it as renovating your house room by room, not bulldozing it. Banks can launch new products, test features, and migrate at their own pace, minimizing risk and disruption. This approach unlocks faster time to market, personalized experiences using liberated data, and agility to adapt and respond to market changes.
Composable banking supports sustainable upgrades at scale, focusing on supporting customers rather than merely providing services. This approach delivers what customers need, when they need it — real-time fraud alerts, savings nudges, flexible payments — without disruption, through:
Personalized experiences: Advice and tools reflecting real lives, not generic profiles.
Embedded finance: Features appear where customers already are—inside the apps and tools they use daily.
Inclusive access: Services designed for real-world complexity, from freelancers to first-time borrowers.
Modernization in banking is a continuous journey that must evolve with customers. True customer centricity means anticipating needs and solving problems before they arise. With 60% of financial institutions reporting more fraud events than in 2024, and customer expectations rising daily, the window for gradual change is closing.
To overcome core modernization barriers, bank technology and business leaders should align around a shared vision — one that addresses today’s operational needs while building the agile, customer-centric infrastructure for what’s next.
