As banks’ IT budgets are increasingly consumed by maintaining outdated core systems, experts warn that delays in modernising infrastructure could undermine customer experience and competitiveness by 2027.
By 2027, many banks may still be running on core systems that were built decades ago, even as customers expect instant service and constant availability. The Cyprus Mail article warns that this mismatch is becoming harder to ignore: a simple request for a new field on a loan application can still trigger months of work, multiple vendor approvals and changes to a COBOL batch process that few employees fully understand. Accenture’s 2026 Banking Trend Report, as summarised by Orbograph, says nearly 70% of banks’ IT budgets are being consumed by the upkeep of legacy systems, leaving far less room for innovation.
That budget squeeze matters because it slows nearly every attempt to improve the customer experience. Brendan Thorpe, writing for Fintech Strategy, argues that old core banking systems still built around batch processing make it difficult to deliver the joined-up, real-time service customers now expect across mobile apps, branches and call centres. The result is a familiar one: banks may present a modern front end, but the machinery underneath remains fragmented, slow to change and expensive to maintain.
Several industry summaries point to the same structural problem. RS2, as reported by Digit, says legacy platforms often force banks into a patch-and-upgrade cycle that drains resources and creates data silos, while Bobsguide and The Fintech Times both describe the same 70% figure as evidence that too much IT spending is still tied up in keeping old systems alive. Those reports also suggest that banks are increasingly looking at orchestration layers, including AI-enabled tools, to knit together older systems without taking on the risk of a full replacement all at once.
The Cyprus Mail piece argues that the safer path is usually not a dramatic rip-and-replace programme but a gradual decoupling of the front office from the legacy ledger. In practice, that means separating customer-facing services from the core system, using application programming interfaces, or APIs, to connect them, and then modernising payments and other functions step by step. That approach mirrors the broader industry view reflected in the related summaries, which show that banks are under pressure to move faster without exposing themselves to the operational and regulatory risks of a big-bang migration.
The article also makes clear that banks can no longer treat this as a purely internal technology issue. Financial services are increasingly expected to plug into wider digital ecosystems, from embedded lending at checkout to payroll and Banking-as-a-Service partnerships. That requires API-first architecture, sandbox access for developers and event-driven systems that can respond in real time rather than wait for overnight batches. The Fintech Times summary and the Cyprus Mail article both suggest that institutions that fail to make this shift risk becoming technically compliant but commercially irrelevant.
The underlying message is blunt: banks that continue to pour money into ageing cores may preserve the status quo, but they will struggle to compete with newer players that can launch products faster and adapt more easily. The Cyprus Mail article argues that even partial progress, such as a live API layer, a streaming data backbone and one customer-facing service removed from the old core, can change a bank’s competitive position. For many lenders, the question is no longer whether modernisation is necessary, but how long they can afford to delay it.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
