Core Banking’s New Mission Is Keeping Up With Instant Expectations

For years, core banking systems were viewed as essential but largely invisible infrastructure. They maintained account balances, processed deposits and withdrawals, and served as the system of record behind the customer relationship. Today, the same systems have become central to one of banking’s biggest strategic questions. Can financial institutions meet customer expectations shaped by a digital economy that rarely waits? “The world today is really heavily focused on customer journey and the customer pain points that we want to solve,” Prashant Shah, vice president of product management at Galileo, told PYMNTS. The evolution reflects what Shah described as an economy where immediacy has become the norm. “It’s not just in payments,” he said. “It’s everywhere. People want instant gratification.” Consumers rarely distinguish between a payment, a retail purchase or a banking interaction. They simply expect each experience to work with the same speed and simplicity. That places new demands on core banking platforms that, in many institutions, were designed decades before real-time payments, digital wallets and always-on banking became everyday expectations. Redefining the Modern Financial Institution Historically, the core banking platform functioned primarily as a ledger. It tracked balances, settled transactions and supported individual banking products. Today’s institutions require something broader. The core is becoming the foundation that connects payments, lending, fraud controls and servicing into a single operating environment. “A modern financial institution, in my mind, is someone who has flexible technology and infrastructure that can fulfill multiple customer needs within a cohesive, unified customer experience,” Shah said. Delivering that experience requires institutions to rethink the way technology is organized behind the scenes. Rather than treating deposits, cards, loans and payments as separate businesses supported by separate systems, banks are being challenged to build around customer journeys that cross those traditional boundaries. Legacy Systems Still Divide the Customer That transition remains difficult because many core banking environments continue to reflect decades of incremental development. “All the legacy systems are very siloed,” Shah said. Silos extend beyond technology. Deposits, lending, fraud management, real-time payments and customer servicing frequently maintain separate data repositories and operational workflows. As institutions introduce new payment rails, digital channels and embedded financial products, those divisions become more visible. Fragmented data makes it more difficult to develop a complete understanding of customers, automate operational decisions or provide employees with a unified view of each relationship. Customer service representatives may see only part of an account history. Fraud teams may evaluate transactions without broader customer context. Lending decisions may rely on incomplete information despite years of established relationships. Many institutions attempt to address those shortcomings by layering new technology onto existing systems. That approach can be useful when introducing a limited capability or testing market demand, Shah said. The difficulty arises when temporary solutions become permanent architecture. Individual enhancements can multiply into a collection of disconnected point solutions that add complexity instead of reducing it. The New Core Depends on Connected Data Modernization is ultimately less about replacing technology than changing the role of the core itself, Shah said. Rather than supporting isolated products, the core should connect information, workflows and decision-making across the institution. “The goal has to be scalable, reusable capabilities, not individual isolated products,” Shah said. The philosophy also shapes his view of artificial intelligence. While AI is becoming part of banking strategy, its effectiveness depends on the quality and accessibility of underlying data, Shah said. AI can identify operational bottlenecks, reveal customer friction and highlight opportunities for improvement. It cannot compensate for disconnected systems or fragmented information. “I don’t think it’ll modernize for you,” Shah said. “It’ll point you in the right direction.” Unified data is an increasingly valuable asset. A connected view of the customer can improve decision-making across lending, fraud, servicing and payments while giving AI the context it needs to produce meaningful insights rather than isolated recommendations. Partnerships can accelerate the process when they are built around long-term capabilities rather than individual implementations, Shah said. Institutions contribute customer relationships, regulatory expertise and risk management, while technology partners bring modern infrastructure and connectivity. Success depends on designing those relationships with future growth in mind rather than solving a single operational problem. Watch the full interview with Prashant Shah to learn more about: - Why only a small percentage of institutions complete large-scale core modernization efforts. - When adding new technology to a legacy core can accelerate innovation, and when it simply creates additional technical debt. - How connecting customer data across deposits, lending and payments can improve fraud detection, servicing and credit decisioning.