Embedded finance is reshaping the financial services landscape, enabling banks to deliver products and services directly within the digital journeys of non-bank partners—whether that’s e-commerce platforms, ERP systems, or industry-specific software. The promise is compelling: seamless, context-rich experiences for end customers, new revenue streams for banks, and deeper, more strategic partnerships across industries. Yet, while many banks have launched pilot embedded finance initiatives, few have managed to scale these into profitable, multi-partner ecosystems. The reason? Legacy core banking systems are fundamentally ill-suited to the speed, flexibility, and modularity that embedded finance demands.
Legacy core systems are typically monolithic, siloed, and slow to change. They make it difficult to expose services via APIs, integrate with partner platforms, or iterate products at the pace digital-native partners expect. Workarounds and customizations to support embedded finance often increase operational risk, drive up costs, and create compliance headaches. Data is fragmented, inhibiting real-time analytics, personalization, and efficient regulatory reporting. As banks attempt to serve multiple partners—each with unique technology stacks and customer needs—these limitations become unsustainable.
To move beyond isolated pilots and bespoke integrations, banks must modernize their core. This means laying a digital foundation that enables:
Publicis Sapient’s experience shows that successful core modernization—and, by extension, scalable embedded finance—follows a four-step journey:
A successful modernization program begins with a clear, organization-wide commitment to change. Articulate the business case for modernization as a strategic enabler for new growth, including embedded finance. Align leadership around the need for change, the benefits of modern capabilities, and the risks of standing still. Assess organizational readiness, data and technology gaps, and regulatory requirements.
Set up for success with the right people, roadmap, and architecture. Assemble cross-functional leadership and delivery teams. Design a future-proof, coreless architecture leveraging cloud-native platforms, robust APIs, and modular components. Develop a clear, iterative roadmap that links modernization to tangible business outcomes, such as faster partner onboarding or new product launches. Fast-track critical enablers, including cloud infrastructure and API/data strategies.
Deliver a ‘pathfinder’—a customer- or partner-facing launch that demonstrates value and builds belief. Build foundational elements (cloud, data, DevSecOps, vendor integrations). Launch with an initial partner or product, focusing on real-world feedback and continuous iteration. Manage coexistence with legacy systems, using automated reconciliation and model office constructs to ensure business readiness and regulatory compliance.
Accelerate migration from legacy systems through iterative releases, prioritizing high-value features and customer journeys. Establish a ‘modernization factory’ to support ongoing migration, capability expansion, and decommissioning of legacy systems. Embed new ways of working—agile, cross-functional, and outcome-focused—across the organization.
Our playbook provides a proven, four-step approach to core modernization, tailored to the needs of banks seeking to lead in embedded finance. We bring deep expertise in strategy, technology, and partner ecosystem management, stress-tested methodologies and accelerators for rapid delivery, and a track record of helping banks move from pilot to enterprise-scale embedded finance.
Ready to modernize your core and unlock the full potential of embedded finance? Let’s build the digital foundation for scalable, multi-partner ecosystems—together.