AI expands banks’ options for modernizing legacy cores

AI tools are enabling banks to connect older core systems with newer applications, potentially reshaping how services are delivered. This explainer covers what changed, who is affected, and practical next steps for customers and industry readers.

What changed

Banks are using artificial intelligence (AI) to bridge between old core systems (like COBOL-based software) and modern applications. AI agents can access bank systems through application interfaces, middleware connections, and, in some cases, the software tools that staff already use. This expands capabilities beyond chat assistants to fully automated tasks: pulling data, moving information between programs, and completing steps in workflows. The shift mirrors broader trends where AI is embedded into data and technology functions across financial firms.

Who is affected

The change touches banks’ IT teams, operations staff, and ultimately customers who rely on banking services. IT and integrations teams may gain new tools to support modernization projects, while customers could see faster, more integrated services as banks streamline processes that touch accounts, payments, and reporting. The report notes widespread adoption of newer AI within financial services, suggesting impacts may occur across many institutions as they adopt these tools.

Practical next steps

For readers and industry watchers: monitor how banks describe goals for modernizing cores, whether AI components are used to retrieve data or to execute steps in workflows, and how staff workflows change. For customers, expect potential improvements in service speed and reliability as back-end systems become more connected. If you work in banking tech, consider how to design interfaces that securely expose necessary functions to AI agents and ensure proper authorization and auditing. Stay aware of governance around legacy-code modernization and the security implications of AI-mediated access to core systems.

Limits and questions

Details on implementation may vary by institution. AI integration into legacy cores raises questions about data security, compliance, and system stability. It is not yet clear how quickly customers will experience tangible changes in everyday banking. Look for further disclosures from banks about pilot programs, timelines, and customer impact as institutions test these AI-enabled integrations.

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