The U.S. banking industry is entering a foundational transition, one that could define the next two decades of financial services infrastructure.
The recent announcement of CoreAdvance, Fiserv’s new next-gen core banking platform, is the latest in a series of moves by major providers to nudge banks, especially those on older platforms such as Premier and Precision towards modernized systems. With FIS and Jack Henry also now pursuing similar modernization agendas, this isn’t a product refresh cycle. It’s a systemic shift!
At the center of this shift is the opportunity for System Integrators (SIs) and consulting firms. Over the next 3 to 5 years, multiple banks will now face core renewal decisions. These decisions are not just technical upgrades either, they are strategic moves that touch data architecture, cloud strategy, risk posture, innovation roadmaps, and customer experience design.
The magnitude and complexity of these transformations will require deep banking expertise, industrialized capabilities, and strong partner ecosystems, as our analysts have explained below in our latest blog.
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Understanding the market opportunity
To appreciate the scale of the opportunity, consider the current structure of the U.S. core banking market:
- According to the Federal Reserve Bank of Kansas City, the top three core providers – Fiserv, FIS, and Jack Henry serve:
- About 70% of U.S. banks
- Nearly 50% of credit unions
- Fiserv alone supports over 40% of banks and 30% of credit unions, driven by platforms like Premier, Precision, and DNA
- Jack Henry supports about 20% of banks and 12% of credit unions, largely through Silverlake and CIF
This level of market concentration has significant implications:
- Switching friction is high: Deep integration with legacy infrastructure means that even unhappy customers often stay put
- Contract structures are sticky: Multi-year core contracts limit bank flexibility and lock in tech debt
- Modernization is overdue: Many of these systems were deployed decades ago, long before Application Programming Interfaces (APIs), real-time payments, and cloud-native architecture became the norm
Why banks are finally ready to modernize their core
While calls for core transformation are not new, we are now seeing a confluence of drivers making action unavoidable. Several factors are converging to create urgency:
1. Technical debt and obsolescence
- Legacy cores cannot support modern banking experiences such as real-time payments, dynamic personalization, or instant credit decisioning
- Banks are running batch-based systems with limited configurability and costly customizations
2. Digital demands and experience gaps
- Consumers expect omnichannel, 24/7 banking with embedded financial experiences
- Competing against digital-native neobanks or FinTechs with cloud-based cores is increasingly difficult
3. Regulatory and risk considerations
- Regulators are pressing banks to ensure operational resilience, data security, and system agility
- Manual compliance processes built around legacy systems are time consuming and expensive
4. Platform innovation
- Cloud-native, API-first, and modular core platforms from disruptors (such as Mambu, Thought Machine, 10x, and Temenos) offer a credible alternative to the old monoliths
- The rise of as-a-Service models has enabled banks to wrap and extend for years but now the core itself must evolve
5. Technology provider led modernization
- Fiserv’s CoreAdvance move mirrors similar strategies by FIS and Jack Henry, who are effectively sunsetting legacy platforms and pushing customers towards modernizing or upgrading their earlier systems
The consulting and system integrator playbook: a multi-billion-dollar opportunity
For system integrators, the emerging wave of modernization represents a strategic inflection point
1. Support with migration to incumbent’s modern core
- Build repeatable frameworks for data migration, system conversion, and user testing
- Develop core-to-core accelerators for transitions from core systems such as Premier, Precision, and Silverlake
- Offer program governance and risk controls for complex multi-year programs
- Assist with hosting the modern core on cloud infrastructure including infrastructure-as-code, security compliance, and hybrid-cloud integration
2. Help banks move to an alternate third-party core system
- Partner with new-age core providers to create end-to-end implementation paths
- Provide integration, regulatory mapping, and sandbox testing support
- Help banks exit long-term legacy contracts with minimal disruption
3. Build a custom low-code composable core banking system for digitally mature banks
- Architect modular, microservices-based banking cores using low-code platforms integrated with third-party fintech services
- Enable orchestration of fintech ecosystems via modular, event-driven architectures.
- Build digital Know Your Customer (KYC), Anti-Money Laundering (AML), fraud, and reporting modules to accelerate time-to-market
Opportunity for consulting firms are multi-fold:
1. Core modernization strategy and road mapping
- Advise banks on their modernization pathways: whether to stay with their incumbent, switch to a challenger core, or build a custom low-code solution
- Define future-state technology architectures aligned with business strategy, product innovation, and regulatory compliance
- Develop structured roadmaps to sequence transformation across people, process, data, and platforms
2. Vendor evaluation and selection
- Support banks in independent assessments of core platforms, running structured Request for Proposal (RFP) / Request for Information (RFI) processes with clear evaluation frameworks
- Compare the total cost of ownership (TCO), scalability, compliance readiness, and product alignment across legacy and challenger platforms
- Mitigate the vendor lock-in risk and ensure selection aligns with long-term enterprise strategy
3. Operating model and organizational redesign
- Redesign banking operating models to support modern, API-first, and cloud-native cores
- Define new governance, delivery, and service structures that align with modular, composable banking ecosystems
4. Business case and value realization
- Enable banks to build data-backed transformation business cases, linking core modernization to operational efficiency, customer experience, and growth
- Quantify impacts across Operational Expenditures (OpEx), product speed-to-market, ecosystem readiness, and compliance cost savings
- Establish value realization frameworks to track Key Performance Indicators (KPIs) and drive accountability throughout the core transformation lifecycle
What’s next you may ask?
The U.S. banking industry is at a critical inflection point. As modernization becomes inevitable, core banking transformation is no longer a back-office Information Technology (IT) upgrade, it is the strategic foundation upon which the future of banking will be built.
The next generation of core systems will not just power transactions; they will enable innovation, ecosystem partnerships, real-time customer experiences, and cloud-first operating models.
This industry shift will catalyze a wave of large-scale transformation programs across mid-size and community banks over the next decade. It opens an opportunity for both system integrators and consulting firms to flourish. Those that can combine deep domain knowledge with accelerators, advisory frameworks, and strong execution capabilities will play a defining role in how banks modernize, differentiate, and grow.
If you found this blog interesting, check out our blog focusing on The Evolution Of Core Banking Technology: From Foundations To A New Horizon | Blog – Everest Group which delves deeper into transformative ages of core banking and the shifting priorities of the industry.
For a closer look at the leading providers shaping the future of core banking technology, explore our Leading 50™ Core Banking Technology Providers 2024 report. Discover the rankings, market insights, and the innovations driving transformation in the banking industry.
To learn more about core banking, contact Ronak Doshi, [email protected], Kriti Gupta, [email protected], Saumil Misra, [email protected] and Laqshay Gupta, [email protected].
