A Deep Dive into Coreless Banking Architectures

Rethinking the Core: The Rise of Coreless and Composable Banking

The banking industry is at a pivotal moment. As customer expectations soar and digital disruptors reshape the landscape, banks are under increasing pressure to deliver seamless, personalized experiences while maintaining operational efficiency and managing costs. At the heart of this transformation is a fundamental shift away from monolithic, legacy core systems toward more modular, data-centric architectures—a movement known as coreless or composable banking.

What is Coreless Banking?

Coreless banking is not about eliminating the core system entirely, but rather about decoupling the bank’s operations from a single, rigid core. Instead, banks reorient their technology and operating models around data and customer needs, leveraging a flexible ecosystem of best-in-class components. In this model, the core system becomes just one of many interchangeable parts, no longer the gravitational center of the bank’s universe. Data flows freely across the organization, enabling banks to break down product silos, unify offerings, and deliver truly customer-centric experiences.

Why Now? The Drivers Behind the Shift

Several converging forces are accelerating the move to coreless architectures:

Rising Customer Expectations: Today’s customers demand personalized, real-time experiences similar to those offered by digital-first companies. They expect their bank to anticipate needs, offer relevant products, and provide seamless journeys across channels.
Legacy System Limitations: Traditional core systems are expensive to maintain, slow to adapt, and often siloed by product. This stifles innovation, increases operational costs, and makes it difficult to respond to market changes or regulatory requirements.
Data as a Strategic Asset: Banks sit on vast troves of customer data, but legacy architectures make it hard to access, trust, and act on that data in real time. Coreless banking puts data at the center, enabling banks to unlock new value and orchestrate richer customer experiences.
Agility and Cost Efficiency: Modular, API-driven architectures allow banks to innovate faster, launch new products quickly, and scale efficiently. By progressively hollowing out the monolith, banks can reduce technical debt and shift investment from maintenance to growth.
Ecosystem Enablement: The rise of open banking and fintech partnerships means banks must be able to integrate with third-party services and platforms. Coreless architectures make it easier to plug in new capabilities and orchestrate an ecosystem of partners.

The Coreless Journey: Practical Steps for Banks

Transitioning to a coreless architecture is a journey, not a one-time event. Based on Publicis Sapient’s experience guiding leading banks through this transformation, here are key steps and considerations:

Start with the Business Case and Vision
- Define the outcomes you want to achieve—whether it’s faster product launches, improved customer experience, or cost reduction.
- Align stakeholders across business and technology on the vision for a data-centric, modular future.
Assess and Prioritize
- Map your current architecture and identify pain points, especially where legacy systems are holding you back.
- Prioritize areas for modernization—this could be by business line, product, or customer journey.
Hollow Out the Monolith
- Begin by extracting key functions from the core, such as payments, customer data, or onboarding, and move them to dedicated platforms or services.
- Use APIs to connect these new components, enabling real-time data flow and easier integration with partners.
Pilot and Prove Value
- Start with a pilot—such as launching a new digital product or migrating a single business line—to prove the new approach and unlock early value.
- Use the pilot to refine your operating model, governance, and risk management practices.
Scale Progressively and Manage Risk
- Scale up carefully, learning from each phase and ensuring customer and operational risks are managed.
- Invest in change management to bring people along on the journey, from leadership to front-line teams.
Orchestrate the Ecosystem
- Leverage your new architecture to integrate with fintechs, data providers, and other partners, expanding your value proposition.
- Focus on data governance, security, and compliance as you open up your ecosystem.

Risk Management and Scaling Strategies

Coreless transformation is not without risk. Banks must manage the complexity of running old and new systems in parallel, ensure data integrity, and maintain regulatory compliance. Key strategies include:

Progressive Migration: Avoid big-bang replacements. Migrate incrementally, validating each step and minimizing disruption.
Robust Data Governance: Establish strong data management and security practices to protect customer information and comply with regulations.
Change Management: Invest in upskilling teams and fostering a culture of agility and innovation.
Vendor and Partner Management: Choose partners with proven track records in modular banking and ensure interoperability across your ecosystem.

The Payoff: Agility, Customer-Centricity, and Sustainable Growth

Banks that embrace coreless architectures are already seeing significant benefits:

Faster time-to-market for new products and services
Lower total cost of ownership and reduced technical debt
Enhanced ability to personalize and orchestrate customer journeys
Greater resilience and scalability in the face of market change

Publicis Sapient: Your Partner in Coreless Transformation

With deep expertise in digital business transformation and a track record of guiding banks through core modernization, Publicis Sapient is uniquely positioned to help you navigate the coreless journey. Our approach combines strategy, technology, and change management to deliver value at every stage—from vision and business case to implementation and scaling. We help banks unlock the power of their data, orchestrate ecosystems, and build the agility needed to thrive in a rapidly evolving market.

The future of banking is coreless: modular, data-driven, and customer-obsessed. Now is the time to start your journey.

Ready to explore coreless banking for your organization?
Contact Publicis Sapient to learn how we can help you modernize, innovate, and lead in the next era of financial services.