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How banks use AI to connect old systems with new payment tech

By Newby

The Future of Core Banking Technology and AI

Financial leaders are increasingly emphasizing the need for banks to upgrade their core banking technology and harness artificial intelligence (AI) to unlock legacy data and enable real-time payments. This shift is crucial as traditional methods of building data platforms have proven too slow and costly in today's fast-paced digital landscape.

Akio Isowa, senior managing executive officer and group chief digital innovation officer of Sumitomo Mitsui Banking Corporation (SMBC), highlighted that banks must adopt a new mindset starting from use cases rather than technology. He emphasized the importance of leveraging AI to transform legacy data into better business outcomes.

At the Singapore Fintech Festival 2025 (SFF 2025), industry leaders from Tencent, Thought Machine, Perflos, and the International Monetary Fund (IMF) discussed the evolution of core banking technology and the role of responsible AI in compliance, fraud prevention, and real-time payments.

Innovations in Core Banking

One approach to unlocking existing data for AI applications involves using frameworks like MCP or agent-to-agent protocols. These tools help bridge old systems with new AI-driven solutions, enabling faster and more efficient data utilization. Isowa explained that the goal is simple: use AI to turn legacy data into better business outcomes.

Tencent showcased an AI-based tool that helps merchants scan and digitize their menus for improved efficiency. Forest Lin, corporate vice president and head of financial technology at Tencent, described how users can scan a food merchant’s QR code to view a menu on their phone and make payments. This innovation saves time for both merchants and customers.

Thought Machine's cloud-based core banking engine, used by 60 banks, has been praised for its scalability and automation. Dr. Paul Taylor, founder and CEO of Thought Machine, noted that banks often lack APIs in their mainframes, leading to a lack of real-time information. By building an API-driven core banking engine, they addressed this issue and enabled more efficient operations.

Evolution of Financial Platforms

Perfios evolved from a digitizing tool to a full-stack platform, according to Sabyasachi Goswami, CEO of Perfios. The platform aggregates and refines data to provide a comprehensive solution for financial services. Goswami mentioned that over the last decade, the way financial services infrastructure was envisioned changed dramatically, moving from a digitizing tool to an ecosystem supporting open banking and collaboration.

Shirin Hamid, chief information officer and director of the information technology department at the IMF, emphasized the importance of resilient technology for central banks. She highlighted the need for relevant tech stacks, including cloud adoption and hygiene capabilities such as enterprise architecture, quality assurance, and Agile methodologies. With increasing geopolitical tensions, cybersecurity has become a top priority for any product or platform developed.

Key Insights from the Panel Discussion

During the panel discussion, several key points were raised:

  • Mohanty: Reflecting on the evolution of core banking, Isowa stressed the need to rethink organizational design rather than focusing solely on technology.
  • Mohanty: Asking about solving basic tech and infrastructure issues, Lin shared how Tencent's AI tool streamlines the ordering process for merchants.
  • Mohanty: Questioning how Thought Machine improved core banking, Taylor explained the challenges of legacy systems and the benefits of a cloud-based, API-driven approach.
  • Mohanty: Discussing technological advancements, Goswami highlighted Perfios' transformation from a digitizing tool to a full-stack platform.
  • Hamid: Emphasizing the importance of modern tech stacks for central banks, she outlined the focus on cloud adoption, security, and agility.

These discussions underscore the transformative potential of AI and modern technology in reshaping the financial sector, ensuring it remains agile, secure, and responsive to evolving customer needs.