As the financial services industry navigates the complexities of 2025, SolomonEdwards—alongside many banks and credit unions—recognizes that operational resilience has evolved from a regulatory requirement into a strategic differentiator. Two pillars are emerging as critical to this transformation: strategic technology investment alignment and core banking system modernization. Together, they form the foundation for agility, innovation and long-term growth.
From Maintenance to Momentum: Aligning Tech Investment with Strategy
For years, banks and credit unions have allocated the bulk of their technology budgets to “run-the-bank” activities—maintaining legacy systems, supporting daily operations and ensuring compliance. While necessary, this approach has often come at the expense of innovation. In today’s fast-paced digital environment, leading institutions are shifting toward “change-the-bank” investments that drive customer-centric transformation, operational efficiency and competitive advantage.
Budget Rebalancing
This strategic realignment begins with a deliberate rebalancing of budgets. Cost savings from automation, cloud migration and process simplification are being reinvested into initiatives that enhance customer experience, enable real-time decision-making and support new business models.
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Technology is no longer viewed as a support function but as a core enabler of business outcomes. |
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A Foundation for Success
To succeed, organizations must integrate technology planning with broader strategic goals. Every dollar spent on tech should contribute to growth, resilience or regulatory readiness. Simplifying operations—by streamlining processes, consolidating platforms and eliminating redundancies—is essential to reduce complexity and unlock agility.
Building capabilities in data governance, cloud-native infrastructure and talent development is equally critical. Strong data governance and quality management are foundational for real-time analytics, AI and compliance. Banks must establish clear ownership and enforce data standards. Treating data as a strategic asset ensures decisions are based on accurate, trustworthy information. Adopting cloud-native infrastructure enables scalability, resilience and faster innovation. Architecting systems with APIs and microservices allows for easier integration with partners and quicker deployment of new features.
This shift demands intentional design, not just migration, to align with evolving business needs. The transition from legacy system support to modern platforms requires a deliberate talent strategy. Upskilling teams in automation, Application Programming Interface (API) development and AI tools—along with fostering a culture of continuous learning—ensures long-term adaptability. Institutions that align talent development with technological evolution will unlock greater agility and innovation.
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Cross-functional collaboration between business and IT leaders ensures that technology decisions are aligned, accountable and impactful. This shift from reactive spending to strategic investment is not just a financial exercise, it’s a cultural transformation. |
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Modernizing the Core: A Strategic Imperative for Agility and Growth
At the heart of this transformation lies the modernization of core banking systems and how operations, branches and call centers interact with them to manage their daily processes. Legacy platforms, often built decades ago, are increasingly seen as barriers to innovation. They are costly to maintain, difficult to scale and vulnerable to cybersecurity threats. In contrast, modernizing your core infrastructure offers significant advantages in efficiency, resilience and customer responsiveness.
Cloud-native Architecture
Cloud-native architectures are leading the way, enabling banks to scale operations seamlessly, deploy new features rapidly, and achieve near-perfect uptime. These platforms reduce dependency on legacy hardware and outdated programming languages, while offering flexibility and cost savings compared to their older counterparts. Modular and composable architectures further enhance agility, allowing banks to plug in new capabilities and personalize services at scale.
Governance
Governance is key to managing the complexity of core modernization. Many institutions are establishing a “Core Modernization Command Team”—a centralized strategy and roadmap that aligns executives, stakeholders, manages risks, and ensures transparency across business, technology, and operations. This structure helps maintain momentum and accountability throughout the transformation journey. Building a strong business case—one that quantifies long-term value, operational gains, and strategic alignment—is essential to secure stakeholder buy-in and funding.
Customer Experience
Customer experience remains central to the modernization effort. Banks must ensure service continuity during migration, using proactive communication and real-time support to maintain trust and minimize disruption. A robust change management process is critical to prepare both customers and staff for new systems, interfaces and processes. Clear training, timely updates, and targeted engagement strategies help ease the transition, reduce resistance, and drive adoption.
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Ultimately, core modernization is not just a technology upgrade, it’s a foundational shift toward agility, resilience and customer-centricity. It enables banks to respond to market changes, regulatory demands, and customer expectations with speed and confidence. |
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Building the Bank of the Future
In 2025, the convergence of strategic tech investment and core modernization is reshaping the banking landscape. Institutions that embrace this dual transformation are better positioned to navigate uncertainty, unlock innovation and deliver exceptional value to customers. By aligning technology with strategy and modernizing the core, banks are not just future-proofing their operations, they’re building the bank of the future.
Read about our work helping a leading U.S. bank accelerate its digital transformation by modernizing its core banking platform, building a scalable API infrastructure and adopting a cloud-based data ecosystem.
About the Author
Frank is a Senior Vice President in the Banking and Financial Services practice at SolomonEdwards. With more than 30 years’ experience in the banking industry, he brings a strong balance of expertise across all areas of the financial organization, having worked in back office and technology roles. Frank’s focus is on partnering with institutions to design a technology strategy and digital experience to create frictionless and efficient customer and staff experiences.
To learn more, contact Frank at fferriola@solomonedwards.com.
