Migrating a core banking system is often perceived as a high-risk, high-complexity undertaking—and with good reason. It touches every aspect of a bank’s operations, from customer data and compliance to product configuration and service delivery. Yet, in the face of rising customer expectations and digital transformation pressures, staying with outdated legacy systems is no longer a viable option.
Why Banks Migrate Their Core Systems
The decision for a bank to undertake a core banking system migration is rarely taken lightly. It is a significant undertaking involving substantial investment, time, and organizational effort. According to a Forrester report, over 60% of global banks are currently planning or executing core transformation projects. Several compelling factors drive this strategic imperative for financial institutions worldwide:
Mergers and Acquisitions: When banks merge or acquire other financial institutions, the need to consolidate disparate core systems into a unified platform becomes critical for achieving operational synergies and realizing the full benefits of the integration.
High Maintenance Costs: Maintaining aging core systems can consume a significant portion of a bank’s IT budget. The scarcity of skilled personnel familiar with older technologies and the increasing risk of system failures contribute to escalating operational expenses.
Digital customer expectations: Modern users expect real-time, intuitive, and personalized banking experiences. Legacy cores often lack the agility and APIs needed to deliver them.
Operational inefficiencies: Monolithic architectures and outdated codebases make it difficult to automate, optimize, and innovate.
Regulatory pressure: Compliance with evolving standards (e.g., PSD2, Basel IV) demands more flexible and modular systems.
Limited Product Innovation and Time-to-market demands: Launching new financial products or adapting to market trends is significantly slower with rigid legacy systems.
Data Silos and Inefficient Processes: Older core systems often result in fragmented data across different departments and systems, leading to inefficiencies in data management, reporting, and decision-making.
Vendor support phase-out: In some cases, vendors withdraw support for legacy core systems or force transitions to new platforms, placing banks under pressure to migrate, often with significant cost and limited strategic value.
Gartner notes that banks with legacy systems spend up to 75% of their IT budgets on maintenance, leaving little room for innovation. This stifles growth and limits competitive advantage.
Banks with legacy systems spend up to 75% of their IT budgets on maintenance, leaving little room for innovation.
Source: Gartner
Key Challenges in Core Migration
While the benefits of core banking migration are clear, the journey is fraught with challenges. Data migration is consistently cited as the top concern in Gartner and Forrester surveys. Banks must ensure that all historical, transactional, and customer data is transferred accurately and securely, without loss, corruption, or compliance breaches. The sheer volume and sensitivity of this data elevate the complexity of the task.
Another critical challenge is managing business continuity. Core migration affects not only IT infrastructure but also day-to-day banking operations. Poorly executed transitions can result in outages, service disruptions, and customer dissatisfaction—damaging a bank’s reputation and customer trust. Skill gaps also pose a threat. Many banks lack in-house expertise in modern architectures like microservices, cloud, and event-driven systems, making it difficult to drive migration projects internally.
Additionally, institutions often find themselves locked into vendor ecosystems that are hard to exit. Legacy providers may offer limited extensibility or customization, further complicating migration efforts. According to Gartner, 30% of core transformation projects fail to deliver the expected results, often due to insufficient planning, inadequate change management, and a lack of alignment between business and IT stakeholders.
When Core Migration Succeeds
Despite these risks, successful migrations do happen—and more frequently when they follow a pragmatic and phased strategy. Rather than replacing the entire core in one go, leading banks adopt an incremental approach, starting with non-critical modules or new product lines. This allows for testing, learning, and iterative improvement without disrupting core business functions.
Success is also tied to organizational alignment. When leadership across technology, operations, and business strategy collaborates on a unified migration roadmap, the likelihood of success improves significantly. Cloud-native platforms with modular, API-first, and event-driven architectures provide the technological flexibility needed to support gradual transformation. Just as important is the choice of partner: banks that work with vendors offering end-to-end support—from planning to go-live and beyond—are more likely to complete their migration with confidence.
The BOS Approach to Core Migration
BOS, developed by INCAT, is designed to make core migration not only feasible but also future-proof. Unlike many traditional systems that require a “big bang” approach, BOS supports phased migration, allowing banks to transition gradually while maintaining business continuity.
“We recognize that for many banks, replacing the core system is like open-heart surgery,” says Zdzisław Grochowicz, Chief Product Officer at INCAT. “That’s why we designed BOS to be modular and interoperable. You can start small—for example, by migrating a single product line or customer segment—and expand from there.”
Key strengths of the BOS migration model include:
Microservices-based architecture: Enables gradual replacement of legacy components without disrupting the entire system.
Event-driven engine: Keeps legacy and new systems in sync during transition.
API-first design with always-up-to-date migration tools: Facilitates integration with existing infrastructure, front-end applications, and third-party services, while ensuring that data migration mechanisms remain current and efficient. These tools ensure accuracy, traceability, and compliance throughout the process.
We recognize that for many banks, replacing the core system is like open-heart surgery. That’s why we designed BOS to be modular and interoperable. You can start small—for example, by migrating a single product line or customer segment—and expand from there.
Zdzisław Grochowicz, Chief Product Officer at INCAT
What Sets BOS Apart
BOS stands out with its event-first architecture and high degree of customizability without coding.
“Many platforms offer configuration, but BOS gives banks the power to define business rules and workflows dynamically, without having to touch the source code,” explains Piotr Hanusiak, CEO of INCAT. “This means lower maintenance costs, shorter implementation times, and a system that truly adapts to your business.”
Another key differentiator is INCAT’s deep involvement throughout the migration process. Rather than handing over documentation and walking away, INCAT provides:
- Dedicated migration teams with core banking and domain-specific expertise
- Flexible deployment options (cloud, on-prem, or hybrid)
- End-to-end support, from data mapping and sandbox testing to go-live readiness and beyond
Many platforms offer configuration, but BOS gives banks the power to define business rules and workflows dynamically, without having to touch the source code. This means lower maintenance costs, shorter implementation times, and a system that truly adapts to your business.
Piotr Hanusiak, CEO of INCAT
Lessons from the Field
Banks that have successfully migrated to BOS often follow several best practices. Many start with greenfield initiatives — like launching a digital-only brand or testing new loan products —to validate the platform. Running BOS in parallel with legacy systems helps reduce risk and ensures smooth handover when the time comes. Prioritizing open APIs from the outset enables faster integration with payment processors, CRMs, and compliance tools.
Training and internal engagement are equally crucial. Institutions that invest early in onboarding their technical teams and aligning business stakeholders tend to experience smoother adoption and faster go-lives.
Not a matter of if, but when
Core banking migration is no longer a question of if, but when. In an era of rapid digital disruption, customer expectation, and regulatory flux, modernizing the core is essential for future viability. Yet the path to transformation must be taken with care, clarity, and the right partners.
BOS by INCAT offers more than just a next-generation core—it delivers a methodology and a team equipped to handle the entire journey from legacy to modern banking. For banks ready to make the leap, BOS provides the architecture, flexibility, and support needed to transform with confidence. The question isn’t whether your bank should migrate—it’s whether you’re choosing a partner that can take you where the future is headed.
If you’re looking to migrate your core, explore how BOS can be the foundation of your success. Contact us to learn more!