Banking & Financial Services – Where Legacy Meets Regulation
The DACH banking sector operates some of the most complex legacy IT estates in Europe. Mainframes running COBOL and PL/I still power core banking, payments, and accounting at major institutions. Germany’s cooperative banking network alone manages 950 banks with 89 million accounts and 87 billion annual transactions. Mainframe costs consume over 50% of IT budgets while blocking digital onboarding, instant payments, and AI integration.
The result: a sector caught between five concurrent regulatory programs (DORA, PSD3, Instant Payments, Basel IV, EU AI Act), accelerating competition from digital-native challengers, and a retiring generation of mainframe specialists. Closing the gap between legacy operations and modern digital banking requires deep technical capability at the intersection of mainframe optimization, core banking modernization, regulatory compliance, and AI-powered automation.
Key Challenges – and Proven Approaches
Regulatory Pressure
DORA, Instant Payments Regulation, PSD3, Basel IV, and the EU AI Act impose five concurrent compliance programs – each requiring system-level changes, all on tight deadlines. Fines under DORA alone reach 2% of global turnover.
- DORA ICT resilience testing and Instant Payments implementation delivered as structured compliance programs – all five fronts addressed in parallel
- EU AI Act conformity for credit scoring and AML models with built-in transparency and audit trails
- Regulatory requirements integrated as first-class engineering constraints from project start – compressing timelines and preventing rework
Mainframe Cost and Talent Pressure
Mainframe infrastructure consumes over 50% of IT budgets, with costs growing 15–20% annually. Institutional knowledge is concentrated in retiring COBOL specialists – every departure risks critical knowledge loss. A twin squeeze on digital investment.
- Code-level MIPS reductions of 28–90% through algorithmic optimization, zIIP offloading, and DB2/IMS tuning – first results within 4–6 weeks
- SLA-governed managed operations with DORA/VAIT compliance and ISO 9001/27001 certification – knowledge transferred into standardized processes
- Systematic root-cause elimination drives incident volumes down quarter over quarter
Core Banking Lock-In
65% of banks are exploring next-generation core banking, but multi-year transformation complexity and vendor lock-in limit progress. Monolithic COBOL/PL/I cores lack the API surface for fintech integration, open banking, or instant payment rails.
- Strangler-fig and parallel-run strategies keep production operational throughout transformation
- API-fication of legacy COBOL cores enables open banking and PSD3 compliance without big-bang risk
- AI-accelerated COBOL-to-Java migration compresses timelines from years to quarters
Accelerating Competition
N26 reached first quarterly profit in 2024 with approximately 5 million active customers. The Banking-as-a-Service market is projected to reach $65.8 billion by 2031. Digital-native competitors operate at a fraction of the cost base and at multiples of the deployment speed.
- AI-powered AML/KYC automation with agentic evidence gathering reduces manual review effort
- Behavioral analytics enable real-time fraud detection with 20–40% improvement in identification rates
- AI-optimized credit scoring with full explainability and audit trails
- Conversational AI for customer service and digital onboarding at scale
What We Deliver for Banking & Finance
Core Banking Modernization
Incremental modernization of core banking, payments, and lending systems – from COBOL/PL/I on mainframes to Java on cloud-native platforms. Strangler-fig and parallel-run strategies keep production systems running throughout. AI-accelerated code migration compresses timelines from years to quarters. Business logic is preserved with automated functional-equivalence testing.
Mainframe Cost Optimization
Code-level MIPS reduction of 28–90% through algorithmic optimization, batch job consolidation, workload redistribution, and DB2/IMS tuning. Success-based pricing available – we only earn when measurable savings are achieved. Typical first results within 4–6 weeks.
Regulatory Compliance Enablement
DORA readiness assessments with ICT resilience testing plans. Instant Payments Regulation implementation. PSD3/PSR API quality and Verification of Payee compliance. EU AI Act conformity for credit scoring, AML, and fraud detection models. Regulatory requirements are an integral part of technical delivery from the start.
AI-Powered Automation
AML/KYC automation with agentic evidence gathering reducing manual review effort. Fraud detection using behavioral analytics and real-time transaction monitoring with 20–40% improvement in identification rates. AI-optimized credit scoring and lending decisions with full explainability and audit trails. Conversational AI for customer service and digital onboarding.
Managed Operations with Continuous Regulatory Adaptation
Full application management for banking systems since 2010 – SLA-governed, DORA/VAIT-compliant, ISO 9001 and 27001 certified. We combine ongoing operations with reserved modernization capacity: regulatory adaptations, performance optimization, and incremental architecture improvements delivered within the managed services framework.
API-fication and Open Banking Integration
API strategy and implementation for legacy core systems – exposing banking capabilities to fintech partners, third-party providers, and internal digital channels. PSD3-compliant API design. Partner onboarding acceleration through self-service documentation and sandbox environments. Event-driven integration for real-time data synchronization across the banking platform landscape.
Most banking engagements begin with a Health Check – a focused 1–2 week assessment that creates transparency in complex IT landscapes. From a Host Integration Health Check for MIPS optimization potential to a Software Quality Health Check for core banking modules or an Applied AI Health Check for AML/KYC pipelines – a clear roadmap emerges within days.
Our Services for Banking & Finance
Agentic Engineering
AI-accelerated development for payment processing, compliance systems, and trading platforms.
Enterprise Business Solutions
Platforms for instant payments, open banking, regulatory compliance, and customer portals.
Customer Experience
Mobile banking apps, conversational AI for customer service, and omnichannel solutions.
Software Transformation
Modernize core banking and payment systems – with code-level COBOL/PL/I expertise.
Software Care
Managed operations for core banking with continuous regulatory adaptation.
IT Due Diligence
Code-level assessments for core banking, DORA compliance checks, and M&A technical due diligence.
Your Financial Services Experts
Personal contacts with decades of experience in the financial sector.
Banking & Finance
Mainframes, DORA, PSD3 – where every system change is regulation-critical