This report examines the pace and approach financial institutions are taking to modernize core banking and finance systems, balancing innovation against regulatory and risk constraints.

Parallel-run cutover strategies were used in the majority of successful zero-downtime migrations reported this year. Institutions citing regulatory complexity as their top modernization barrier decreased slightly as more regional regulators published cloud-specific compliance guidance.

We expect continued growth in composable finance architectures, where institutions run core ledger functions on a modernized platform while integrating specialized fintech capabilities at the edge.