10x Banking: Banks Seek Core Tech Amid AI & Cloud Pressures

Today, banks are facing mounting pressure to upgrade their core banking systems. A recent survey of over 200 IT decision-makers in Tier I and Tier II banks across the UK, US, Australia and South Africa reveals that 93% believe their company's future success depends on choosing the right core banking solution.

The research, commissioned by 10x Banking, a fintech company that provides cloud-native core banking platforms, highlights the challenges faced by financial institutions as they attempt to balance innovation with risk management.

Cloud migration gains momentum

The survey indicates a significant shift towards cloud-native technologies in the banking sector. Some 72% of respondents report having migrated some core banking functions to the cloud, with an additional 29% planning to do so within the next five years.

This trend reflects the industry's recognition of cloud technology's potential to enhance scalability, improve customer experience and reduce operational costs. However, the transition is not without its challenges, as 55% of respondents cite concerns about migration risks.

AI integration: A key driver and challenge

Central to risks and the need to transform is artificial intelligence (AI). Approximately 39% of surveyed institutions have already integrated AI with their core systems, while 27% plan to do so within the next year.

The integration of AI technologies, such as machine learning algorithms for risk assessment or natural language processing for customer service, is seen as essential for banks to remain competitive. 

However, many institutions struggle with the technical complexities of incorporating AI into legacy systems.

The 'neo core' dilemma

To mitigate migration fears, 10x Banking highlights the rise of 'neo core' platforms, which have gained popularity over the past decade as alternatives to legacy mainframe systems. These platforms are broadly categorised into two types: configuration neo cores and framework neo cores.

Configuration neo cores offer quick implementation and low development effort but may limit scalability and differentiation. 

Framework neo cores provide long-term growth potential and customisable product development but come with higher maintenance costs and talent requirements.

According to the survey, 22% of respondents have adopted neo core platforms, with more considering adoption in the next five years. 

However, the research suggests that these solutions may have introduced their own set of challenges, dubbed "neo legacy" issues, with operations at those with neo core platforms hamstrung with increased complexity. 

Introducing the 'meta core' approach

In response to the limitations of both legacy and neo core solutions, 10x Banking proposes a new category of core banking technology called the 'meta core'. This approach aims to combine the benefits of configuration and framework neo cores while addressing their respective drawbacks.

The meta core concept promises to offer banks the ability to fully customise pre-built modules using any programming language, potentially reducing complexity, migration costs and maintenance requirements.

Antony Jenkins, CEO and Founder of 10x Banking, comments on the industry's need for a new approach: “We've listened to the urgent need for a new approach to core banking. 

“Our response is the world's first 'meta core' platform, designed to overcome the limitations of both legacy and neo core solutions to provide, for the first time, accelerated, scalable innovation and a clear de-risked path to cloud-native transformation.”

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