Banking Technology Has Changed More in 10 Years Than in the Previous 50
The technology running the global banking system has undergone a fundamental shift since 2015. Before that year, most banks operated on monolithic core systems built by a handful of vendors — primarily FIS, Fiserv, and Temenos. These systems worked but were slow to update, expensive to maintain, and incompatible with the real-time, mobile-first services that customers increasingly demand. By 2025, more than 30% of banks worldwide have begun migrating to cloud-native platforms, according to Celent’s 2025 IT Spending Report.
The banking technology market is now worth $134 billion annually, according to IDC. That spending is shifting from maintaining legacy systems to building new capabilities. Digital banking adoption is the primary driver — banks need technology that can support mobile apps, real-time payments, open banking APIs, and AI-driven personalisation simultaneously.
From Mainframes to Microservices
The most significant technical shift is the move from mainframe-based monoliths to microservices architectures running on public cloud. Mainframe systems process transactions in batches — typically overnight — which means balances are not updated in real time. Modern systems process each transaction as it happens, updating balances, triggering fraud checks, and sending notifications within milliseconds.
Thought Machine, one of the leading providers of cloud-native core banking systems, reports that its Vault platform processes transactions in under 100 milliseconds. That speed enables features that mainframe-based banks simply cannot offer, such as instant spending notifications, real-time budgeting tools, and immediate fund availability after deposits. Fintech revenue growth at 23% annually is partly driven by banks paying for these real-time capabilities.
The Rise of Banking APIs
Application programming interfaces have become the connective tissue of modern banking. The UK’s Open Banking framework now supports more than 7 million active users and 370 regulated providers. In Europe, PSD2 regulations require banks to provide APIs that allow authorised third parties to access account data and initiate payments. Australia, Brazil, India, and Saudi Arabia have implemented similar frameworks.
APIs allow banks to participate in financial ecosystems rather than operating as standalone institutions. A bank with strong APIs can power the financial features inside ride-sharing apps, e-commerce platforms, and accounting software without the end user ever visiting the bank’s own website. This creates new revenue streams and customer touchpoints that were impossible with closed, proprietary banking systems.
AI and Machine Learning in Banking
Artificial intelligence has moved from experimental to operational in banking. McKinsey estimates that AI applications in banking generated $200 billion in value in 2024, split roughly equally between cost reduction and revenue generation. The largest applications are fraud detection, credit underwriting, customer service automation, and personalised marketing.
JPMorgan Chase’s COiN platform reviews commercial loan agreements in seconds — a task that previously required 360,000 hours of lawyer time annually. Fintech companies like Featurespace, Feedzai, and Zest AI provide specialised AI tools that banks integrate into their operations. These tools improve over time as they process more data, creating a compounding advantage for banks that adopt them early.
What the Next Decade Looks Like
Three trends will define banking technology through 2035. First, the completion of cloud migration — Accenture projects that 80% of banking workloads will run on public cloud by 2030, up from 25% today. Second, the integration of generative AI into customer-facing and back-office processes, which could automate an additional 30% of banking tasks. Third, the emergence of programmable money — central bank digital currencies and tokenised deposits — which will require entirely new technology stacks.
Fintech venture investment is flowing disproportionately into companies building for these three trends. The banks that thrive in the next decade will be those that treat technology as their core capability rather than a support function — a shift that has already separated the fastest-growing banks from their slower-moving peers.
