To a greater or lesser extent, moves towards the Open universe (Open Banking, Open Finance, Open Investment and the like) have also contributed significantly to driving what is now called NextGen Core Banking, or the next generation of core banking. While many see this as a major shift, we must also ask ourselves: is this really a new paradigm for traditional banks and digital neobanks, or are we witnessing an ongoing evolution of technologies already present in core banking modernisation?
“In my opinion, this is not a new paradigm. It is undeniable that a historic transition is taking place – from paper-based processes to today's digital systems. While traditional institutions face challenges imposed by their legacy systems and their limitations in a rapidly advancing technological age, born-digital, cloud-native banks have the ability to be more agile and faster in terms of opportunities and offerings to their customers.”
What we call NextGen Core Banking encompasses the development of cloud-native platforms with a flexible, state-of-the-art, scalable and composable architecture
Using microservices as “construction blocks”, they allow business users to create new business resources by composing new microservices, in a virtuous chain. All this with batch processing, real-time transactions, providing immediate updates to customer accounts and enabling faster funds transfers, bill payments and other financial transactions.
Within all that I have described so far, what can be considered “NextGen Core”? While some may perceive this term as having a strong marketing component, it is important to acknowledge that the technologies behind this trend are already being implemented globally in modernisation processes. Technological development is continuous, and what we consider innovative today could become legacy in a few years. However, the key here is how institutions are integrating these tools to transform their operations.
Findings from a survey conducted by Cedar-IBSi FinTech Lab showed that more than half (54%) of respondents consider microservices and API connectivity to be the most important attributes of so-called NextGen Core Banking. Another 23% consider end-to-end capabilities to be the most relevant, followed by cloud-native capabilities (21%) and integrated workflow (2%). Looking at these numbers, I don't see anything about the generation to come. On the contrary: these are current topics today.
I can say that such findings and changes are ongoing and, in my opinion, do not necessarily represent a total paradigm break or something completely novel, but they do show an important evolution: what is changing is not just the technology, but the mindset and strategy of financial institutions.
The real value of NextGen Core Banking lies not just in the technology alone, but in how these platforms enable a profound transformation in operating models and customer interaction.
The real transformation comes from adopting a customer-centric view, not in the traditional sense that has existed for decades, but in a renewed approach that leverages the capabilities of open ecosystems, integration through APIs and radical transparency in financial services. This approach is not only an adaptation of current technologies, but a profound change in the way banks interact with their customers and optimise their operations. The banking of the future, as we are seeing it unfold, is moving towards a flexible, composable, cloud-native model that puts the customer at the center of an interconnected, open network of services.
What will really transform the banking of the future is not just the adoption of new technologies, but a complete reconfiguration of the banking model, where customers, data and open ecosystems converge in such an integrated way that by 2030 today's banking will seem obsolete. Banks that dare to lead this change will not only survive, they will redefine the industry, anticipating customer needs before customers even conceive them.
