FIS Intros Bank Modernization Framework Amid Rising Tech Costs

The company’s Bank Modernization Framework, announced Wednesday (Sept. 17), is designed to help financial institutions (FIs) gear their modernization plans to their current needs.

“Banks are no longer focused on just modernization of the core, but rather modernization of the bank,” Peter Boyer, FIS senior vice president/interim head of banking, said in a news release.

“Because this involves both back-end core processing platforms and front-end systems, the end goal is not a one-size-fits-all journey. This framework is not just a solution for today, but a strategic investment for the future.”

The company notes that this new offering is happening at a time when banks are facing rising IT costs, projected to increase at 9% each year. FIS argues that these pressures, coupled with new artificial intelligence (AI) compliance requirements and competition from FinTechs, have made traditional modernization approaches too risky and expensive.

The framework, the company added, is “grounded by each client’s specific needs and strategic goals enabling each institution to have its own unique starting point based on the maturity of its existing technology.”

PYMNTS examined the importance of modernization for banks Wednesday in a report on Generation Z financial trends. This age group is not reckless with their money — in fact, they are disciplined savers — but has shown a tendency to shy away from traditional FIs.

“Banks can choose to dismiss this as a youthful phase, assuming that as Gen Z consumers mature, marry, buy homes and start families, they’ll come back to traditional accounts,” that report said. “But that bet seems increasingly risky. If the infrastructure of their financial lives — wallets, apps, peer-to-peer transfers — remains frictionless and rewarding, why would they return to older, slower systems?”

Meanwhile, PYMNTS spoke last week with Wendy Tapia, head of product, receivables at FIS, about the way countless back offices have chosen to stick with outdated payment systems and manual processes.

“The reality is that the world is moving way faster than most companies can keep up pace with,” she said. “Because of legacy systems, there are still a lot of organizations that are stuck in heavily manual processes, very fragmented systems. Without realizing it, they are limiting their agility and ability to scale.”