Modernising core systems in financial services without a complete overhaul

By David Tomkins, RVP Financial Services, EMEA North, Appian 

Financial services firms today are grappling with rising customer expectations for seamless digital experiences, round-the-clock access, faster transaction processing, and personalised services. At the same time, they face mounting pressure to comply with real-time regulatory demands — such as instant transaction monitoring, rapid reporting, and the swift detection of suspicious activity.

Meeting these dual challenges requires robust, agile systems capable of delivering exceptional customer experiences while ensuring operational resilience and ongoing regulatory adherence. Instead, many firms are held back by legacy systems that are outdated, inflexible, and costly to maintain.

Why traditional systems no longer meet modern demands

Legacy core IT systems were typically built for specific functions such as payments, lending, or accounting. Over time, these systems have been heavily customised to fit outdated processes, leaving them ill-suited for today’s customer expectations and regulatory pressures. ERP systems are a prime example: originally developed to track financials and manage inventory, they were never intended to support AI-driven process automation, real-time optimisation, or the self-service experiences today’s users demand.

These ageing systems rarely integrate well with modern platforms, APIs or cross-functional technologies. Instead, they create isolated data silos that obstruct collaboration, elevate risk and slow down operations. The result is fragmented customer journeys, slow or incomplete compliance reporting, and operational inefficiencies that put firms at a competitive disadvantage.

Maintaining these legacy systems is increasingly a liability. For any business aiming to stay competitive, modernisation is no longer optional.

The risks of rip-and-replace

Core system modernisation carries significant risk. These systems support mission-critical operations — including millions of daily transactions, complex accounting functions, and regulatory reporting — where even brief downtime can cause major disruption.

A complete “rip-and-replace” approach may sound like a clean break, but it can lead to extended outages, lost revenue and long project timelines. Migrating legacy data is a significant challenge, often stretching over years, while centralised models like data warehouses or data lakes can be expensive and complex to maintain. Worse, when data lakes aren’t properly managed, they risk becoming unstructured ‘data swamps’ that don’t provide real integration.

Short-term fixes aren’t much better. As software ages, workarounds multiply, integrations become increasingly fragile, and custom development costs rise. What businesses are left with is mounting technical debt and a web of hard-to-maintain systems that slow processes down.

Incremental transformation with an agility layer

Rather than a risky overhaul or patchwork fixes, leading financial firms are taking a more agile path. They’re layering modern solutions on top of legacy infrastructure to accelerate innovation with minimal disruption.

At the heart of this approach is the “agility layer” — an AI-powered orchestration framework that connects and extends existing systems. Rather than replacing core platforms, it integrates them with modern applications, APIs, and workflows, enabling transformation without downtime.

The agility layer delivers fast results. Firms can roll out new capabilities in months, not years, by embedding AI, unifying data, and adapting processes in line with fast-changing business needs. Crucially, it allows organisations to innovate without tearing out the systems they still rely on.

Data unification without migration

Disjointed systems don’t just hinder innovation — they interfere with daily operations. When accounting teams have to manually re-enter data across platforms, the risk of errors and delays increases dramatically.

A data fabric — enabled through the agility layer — provides a way to unify data and processes without physically moving data from source systems. It connects to multiple back-end systems, creating a consistent and trusted data model that’s accessible through a user-friendly interface.

By acting as an abstraction layer, data fabric enables seamless integration across departments and functions. It simplifies how organisations access, relate, and use data, regardless of where it’s stored — enabling governed, secure access through low-code tools. For compliance teams, especially, this kind of unified, real-time data access is essential to improving transparency and responsiveness.

Agility is the first step to modernisation

The journey starts with understanding your current systems and identifying the most fragmented workflows. Using tools like process mining, firms visualise process flows to detect inefficiencies, skipped steps and bottlenecks — often achieving measurable improvements within weeks.

By tackling one critical workflow at a time, businesses unlock efficiencies across departments and set the stage for broader digital transformation. Focusing on high-impact areas — like payments, lending or customer onboarding — ensures rapid ROI while building a scalable foundation for change.

Building a composable core for the future

For forward-looking firms, the agility layer offers the fastest route to a modern, composable core. One that supports embedded regulatory controls, end-to-end AI-driven automation, and real-time decision-making.

In a market that demands speed, flexibility, and intelligence, this incremental, layered approach is what enables sustainable transformation — without the risks that come with starting from scratch.