From Legacy to Leading Edge: 5 Core Banking Modernization Takeaways

Amid evolving customer expectations, emerging neobank challengers, and an unprecedented M&A wave, US banking is in a challenging, yet exciting era.

Recently, our President, North America, Jody Bhagat joined The Outlier Podcast, a series dedicated to exploring financial innovation and gaining insights from the industry leaders driving those changes. In a conversation with host Anurag Mukherjee, Jody discusses key topics, including how mid-tier banks can navigate shifting industry trends, and paths forward-thinking institutions should consider to achieve modernization.

Here are the five key takeaways from Jody’s appearance on The Outlier Podcast:

With Tier 1 banks and agile neobanks capturing the majority share of new accounts, mid-tier institutions can navigate this challenge by identifying a specific customer segment and serving them with tailored experience that larger incumbents cannot easily replicate.

A core upgrade is often just a technical patch to manage fragmented vendor ecosystems and legacy tech costs. True modernization is a bolder, business-wide mandate that rethinks a bank’s entire operating model to drive growth and efficiency, and deliver frictionless digital experiences for both employees and customers.

Modernization requires a unified data model. By giving everyone from call center agents to compliance officers access to the same real-time customer data, banks can reduce operational friction and serve customers accurately.

The cost of legacy tech is a competitive disadvantage. While traditional regional banks often have opex per customers of $300-$400 per customer, a digital challenger like Starling Bank in the UK operates at under $70. Closing this gap with modern core platforms means banks can hollow out legacy costs and redeploy capital into revenue-generating products and features.

Artificial Intelligence is only as effective as the data infrastructure supporting it. Because legacy estates are often too fragmented for AI deployment, a cloud-native platform with a 360 view of customer, operational, and transactional is essential to train models quickly and scale AI solutions across the enterprise effectively.

These insights and more provide a digital banking blueprint for future-focused banks looking to navigate the complexities of the modern US market.

Listen to the full podcast episode to hear Jody’s deep dive into the strategies that can help banks grow their competitive edge in a digital-first world.