EP1007: Award-winning core banking

The traditional banking system is trapped in a decades-old technological quagmire, where 80% of IT budgets are spent merely maintaining fragile, decades-old core systems—like a game of Jenga where every move risks collapse. This hidden infrastructure bottleneck explains why banks still take days to clear checks and why new mobile features look outdated. But a quiet revolution is underway. Through a strategy called progressive modernization, banks like LHV are replacing their legacy cores with agile, cloud-native platforms like TuumCore—without shutting down operations. By launching new products on the modern core while keeping the old system running, they flip the budget ratio: 80% innovation, 20% maintenance. This shift unlocks real-time AI, enables ethical Islamic finance, and makes SME lending profitable at scale. The real barrier isn’t technology—it’s legacy thinking. As seen in HSBC’s failed Zing app, treating loyal customers like suspects destroys trust. Yet banks are now realizing that inaction is riskier than change. The most disruptive force in finance may no longer be startups—but the transformation of the very institutions they were meant to replace. If traditional banks adopt fintech-grade tech, the line between disruptor and incumbent may vanish entirely.