What are compensation events?

One of the outstanding features provided by Camunda 8 is its ability to easily handle business transactions that went awry. This workflow pattern allows businesses to define compensatory actions and “undo” steps in a workflow if some operations in the sequence fail. In today’s complex business processes spanning across distributed architectures, we can find many examples where executed tasks need to be undone to reflect the real-world state.

For example, when a system runs financial transactions, money transfers, or online credit applications, it needs to confirm the request, process the transaction, and update the account. If any of the stages are not completed, the system has to be capable of rolling the previous steps back to avoid incorrect transactions or data inconsistencies. Namely, it would be inappropriate to leave the credit request in the confirmed state if the loaned money didn’t arrive in the client’s account, say, because of a failure of a microservice.

So, in business operations, Camunda’s compensation events enable the automatic reversal of actions that were successfully completed, but their results and side effects are no longer seen as desirable. Thus, the compensation feature ensures the process is preserved in a consistent state in case of errors, exceptions, and cancellations.

How do compensation events work in Camunda 8?

Saga

To enforce effective compensation, Camunda supports Saga, an interaction pattern that works well in data consistency management across complex microservice architectures. Unlike the two-phase commit protocol frequently used in distributed systems, the Saga pattern doesn’t reduce the overall system availability with transaction locks. It is also perfectly suited to modern NoSQL databases and message brokers that don’t support two-phase commit.

Thus, Saga is the preferable option for long-running business processes and highly distributed systems, which are almost universal in banking nowadays. It breaks complex processes into small, manageable steps, each of them accompanied by a compensation action needed for correct recovery in case of failure. As a result, the system remains fault-tolerant and consistent while retaining scalability and performance.

Zeebe and BPMN

Camunda’s Zeebe engine works as a Saga Coordinator responsible for either completing the overall transaction or aborting it, bringing the system into a known termination state. The engine has a log-based, event-driven design, where every state change is captured in an append-only log. This allows for efficient recovery and state management, which is crucial for implementing compensation events.

Compensation events in Camunda are created using the BPMN 2.0 standard in Camunda Modeler. They work closely with the engine, which handles process execution efficiently and can scale well.

When a process instance enters a compensation intermediate throw or end event, it triggers the compensation within its scope and invokes all compensation handlers of completed activities. The compensation handlers of active or terminated activities are not invoked. The compensation throw event remains active until all invoked compensation handlers are completed.

Specifics for the implementation of Camunda’s compensation events

• Camunda makes it easy to model compensation in complex business processes with visual BPMN representations.
• Users can create a compensation activity for every task in a process model, be it a service task, a human task, or a subprocess.
• Camunda’s compensation can handle complicated situations like multiple instance activities, compensation handler interruption, triggering compensation handlers in a given order, and more.
• Users don’t need to hand-code rollback logic across multiple microservices and can build robust error-handling mechanisms directly into their process models.

All in all, compensation flows built in Camunda save you the trouble of tracking each transaction individually and ease the complexity of rollbacks.

Real case of a compensation event for banking

Let’s look at how Camunda’s compensation works in a real-life banking scenario of transferring funds. As we’d like to focus on compensation events, we will slightly simplify the process by combining all client validations taking place before a fund transfer into one service task. The validation activities include:

• Checking the format and correctness of the data entered, such as IBANs and bank details
• Confirming that the specified amount does not exceed existing limits
• Verifying the sufficiency of funds in the sender’s account
• Identity verification
• Anti-fraud, anti-money laundering, and compliance checks

The diagram below shows the following scenarios:

1. If any problems are detected during the data validation, Camunda sends a notification informing the client about the fund transfer cancellation. The process is completed.
2. If the validation is successful, the process goes on.
3. In the next step, the sending bank writes off the specified amount from the client’s account. All the operations with the account are logged in the system.
4. If something goes wrong during the write-off (the connection was broken, the bank did not send a response about debiting the account, etc.), Camunda informs the client that the fund transfer process ends in an error. The process is completed.
5. If the write-off operation is successful, the process continues.
6. The next step is replenishing the receiver’s account with the specified amount.
7. If the system identifies an error boundary event during the execution of this operation, Camunda informs the client and triggers a compensation event—a rollback of writing off the funds from the client’s account. Then, the process is completed.
8. If the crediting causes no errors, Camunda logs the account replenishment operation and notifies the recipient of the funds added to their balance. The process is completed.

By implementing the compensation event, the bank ensures no funds are lost or incorrectly processed, maintaining data consistency and complying with regulatory requirements.

Compensation events: use cases and benefits for banking

Compensation events aren’t limited to simple debit-credit operations. They can be used across a wide range of banking processes:

• Loan application processing. An approved loan can be rolled back automatically when a post-approval check fails.
• Fraud detection. It is possible to reverse a flagged fraudulent transaction and notify the relevant departments in the process.
• Cross-border payments. In case of exchange rate mismatches or compliance violations, multiple currency conversions and international transfer operations can be efficiently handled with compensatory actions.
• Lending and mortgage transactions. If the credited party changes their mind or calculation errors are detected, it will be appropriate to change the agreement terms or roll the whole process back with compensation events.
• Commission and fee calculation. When a customer is mistakenly charged a commission or fee, a refund is a surefire way of correcting the situation.
• Settlements and clearing operations. In the event of failures in clearing processes (for example, in interbank transfers), compensation events can roll back and re-execute transactions or ensure the funds’ reversal.
• Payment systems and acquiring. When a payment system fails to process a payment, it can use compensation events to cancel the transaction and return the funds to the customer.
• Card transactions. Returning funds or cancelling the transaction will also be helpful in case of an erroneous debiting, for example, because of duplicate transactions.
• Currency transactions. If there is a change in the exchange rate during the conversion process, compensation events may adjust the original transaction or return funds with due regard to the new conditions.
• Deposit transactions. If a client terminates a deposit agreement early or there are errors in interest calculations, compensation events may adjust the maths or roll back the transactions.

By adopting automated compensation and letting Camunda coordinate complex banking processes, financial institutions can reap many benefits:

1. Minimise financial risk. By defining compensation flows, banks can reduce the risk of incomplete or erroneous transactions, ensuring that funds are accurately handled.
2. Ensure compliance. Automated rollbacks help prevent unauthorised or incomplete transactions and thus work toward meeting regulatory requirements like the PCI DSS and GDPR.
3. Reduce manual workload. Compensation events allow banks to eliminate manual intervention in case of transaction failures, freeing up valuable human resources for more high-value tasks.
4. Enhance customer trust. Banks can build greater customer trust by implementing accurate and transparent transaction processing.

Using compensation events beyond banking 
As event-based, distributed architectures are frequently found outside the financial industry, Camunda’s compensation solution has a much broader application area. Here are some examples of the compensation events usage in other industries:

• Supply chain management: Prevent stock discrepancies by reversing inventory changes if a shipment fails.
• Healthcare: Handle errors in patient data processing or treatment scheduling when managing clinical trials.
• E-commerce: Automatically cancel order confirmations and refund payments in case of errors in order processing or payment authorisation.
• Insurance: Ensure accurate financial records by cancelling overpayments or rectifying policy processing errors.

Final thoughts

By leveraging compensation events, organisations can build more resilient and adaptable process automation frameworks. Thanks to the faster recovery from failures and the reduced risk of process downtime ensured by automated compensation, businesses become more agile and competitive. Camunda 8 provides a powerful mechanism for banks to handle the complexity of modern financial transactions with confidence. By automating rollback actions, they can meet regulatory requirements and enhance operational efficiency while offering a more secure and reliable banking experience for their customers. Contact Camunda or a certified Camunda partner to get professional help in designing your compensation events.

Editor’s Note: This post was written by Maria Alish, a Camunda Champion. Would you like to become a Camunda Champion, and potentially have your blog post published here as well? Learn more about our Champion Program and how you can apply.

The post How a Bank Uses Compensation Events in Camunda 8 appeared first on Camunda.

Sound familiar?

Your customers now choose financial providers like items from a menu, selecting specialized services rather than committing to a single institution. This fragmentation reflects a fundamental shift in banking, driven by two converging forces: the largest wealth transfer in history and the uncompromising demand for tailored services and products.

Trust me when I say, I don’t want the complexity of multiple banks and apps. But if I can’t get what I need, I will find it elsewhere.

The $124 trillion opportunity banks can’t afford to miss

Right now, $124 trillion is beginning to shift from older generations to younger ones. This transfer will happen over just 23 years, not in some distant future. For banks, this isn’t just money changing accounts. This represents a fundamental transformation in how wealth flows across generations and accounts.

Look at the warning signs. According to the Williams Group, 90% of family wealth disappears by the third generation. Most heirs feel unprepared. Only 22% of parents inform their children about inheritance plans before age 25. This knowledge gap creates vulnerability and opportunity.

Your younger customers invest differently. They prioritize impact investing, ESG considerations, and philanthropy. Two-thirds of customers under 40 allocate 70% of their investments to ESG opportunities. They demand different tools, different approaches, and different conversations about money.

Your customers won’t wait

Remember when waiting 2-3 days to move some money around was acceptable? Now, even 2-3 hours feels like an eternity. And given the market volatility we’ve seen lately, even a few hours can mean the difference between a good financial choice and a bad one.

The Financial Conduct Authority discovered that 66% of younger investors spend less than 24 hours deciding on investments. A shocking 14% make these decisions in under an hour. This isn’t just impatience. This is a new operational reality.

Your customers expect to move funds instantly between checking, savings, investment accounts, and retirement funds. They want to monitor positions across distributed accounts. They need the ability to move money at precisely the right moment to seize opportunities in increasingly volatile markets.

And they want to do so with ease. Ironically enough, this is also a key desire for wealth advisors serving these customers: less context switching, more customer focus. A case in point is during significant life events.

Gartner research showed that approximately 50% of younger generations prefer to visit an agent at a bank branch or speak to someone on the phone for major events compared to digital-only channels. The demand for blended experiences that combine digital speed with human expertise has never been higher.

Financial wellbeing starts with knowing your customer

With 48% of consumers feeling financially worse off than last year, your institution has a profound opportunity to deliver meaningful value through holistic wellbeing services.

But here’s the hard truth. Only 40% of financial services companies are confident their customer profiles are both complete and accurate. With today’s technological capabilities, how can there be such a wide gap? Without foundational data, personalized guidance becomes impossible.

Think about what your customers actually experience. Most have fragmented financial identities spread across multiple institutions. They receive disconnected advice based on partial information. They struggle to make confident decisions amid complexity and uncertainty.

Even if your customers are loyal and stick with your bank, the likelihood that your customer data is complete is low. The rise of Open Banking and Open Finance initiatives promises to solve this problem, but most institutions still struggle to align strategy and execution.

What customers truly want is reassurance from trusted experts who see their complete financial picture and can provide guidance based on that holistic view.

Three imperatives for surviving the great wealth transfer

To thrive in this new landscape, focus on three practical initiatives.

Connect everything

Create an ecosystem that bridges all endpoints, from modern APIs to legacy systems and third-party providers. In the Open Banking era, the banks seeing 30% higher customer satisfaction are those enabling seamless data sharing across institutional boundaries.

Your customer doesn’t care about your technical debt. They care about complete financial visibility that enables better decision-making and customer experiences. Process orchestration turns fragmented systems into cohesive customer journeys.

Apply the right level of governance

As AI-driven advisory services expand, establish governance that maintains trust without sacrificing speed. Financial institutions that operationalize AI in one central platform reduce compliance risks while accelerating service delivery.

This isn’t just about risk mitigation. It’s about turning regulatory requirements into competitive advantages through consistent, auditable processes.

Stay agile

The financial landscape changes constantly. Implement operations that enable continuous adaptation to changing market conditions. Banks that build standardized, reusable process components launch new products with 45% less effort.

Your technology must evolve as rapidly as customer needs, with modular components that can be reconfigured without disrupting existing services.

Finding the human balance

The ultimate challenge isn’t technological. It’s human.

Your customers need proper guardrails alongside instantaneous advisory services. They need the freedom to move quickly alongside the wisdom to think long-term. They need digital convenience alongside human expertise.

The most successful institutions will recognize that customers increasingly choose specific providers for specific purposes. They’ll open their ecosystems to gather information across institutional—and even industry—boundaries, creating complete customer profiles that enable truly holistic advice.

Your success won’t come from simply moving money faster or cheaper.

It will come from orchestrating processes that help customers make better financial decisions in real time, transforming the greatest wealth transfer in history into the greatest opportunity for financial wellbeing we’ve ever seen.

For more on this topic, you can watch Sathya Sethuraman, field CTO at Camunda, and Shane Ernest, senior product marketing manager at Camunda, discussing the issue in the video below.

This article is the third in our Financial Services Reflection Series, examining how 2025’s banking predictions are playing out in reality. Read Sathya Sethuraman’s original “2025 Banking & Financial Services Predictions” and explore our solutions for building adaptable banking operations.

The post Money in Motion: A $124 Trillion Moment of Truth appeared first on Camunda.

They can execute complex scams in minutes using AI. And with real-time payments, they can wire money across different accounts using synthetic identities. Meanwhile, legitimate cross-border transfers can still take weeks at certain institutions. This gap represents both a challenge and an opportunity for banks ready to transform their approach to commercial services.

In a recent webinar, Enrico Camerinelli, strategic advisor at Datos Insights, and Sathya Sethuraman, field CTO for banking and financial services at Camunda, explored how process orchestration and automation enables banks to bridge this divide and generate more value for commercial banking clients.

What commercial clients really want

As Camerinelli explains in the webinar, Datos Insights research reveals that nearly 90% of corporate treasurers consider it essential to run banking operations directly from their enterprise systems. This seamless integration creates significant orchestration challenges spanning technology, processes, and people. Not just for the bank itself, but also for commercial clients.

“Corporate users want to control inbound and outbound transactions directly from their enterprise system,” explains Camerinelli. “But this integration creates potential break points that require thoughtful orchestration of applications on both the enterprise and banking sides.” Half of corporate treasurers cited issues with integration, multiple screens, and a high dependence on Excel or external systems.

Without effective orchestration, this integration challenge creates risk. When Datos Insights asked why corporate treasurers partner with fintech firms instead of traditional banks, they cited better functionality (48%), more payment options (46%), better integration with internal systems (43%), and access to real-time payments (41%).

These proof points show the growing risk posed to incumbent banks that are slow to respond to their clients’ needs. If commercial clients don’t get what they need, they’ll pursue other options without thinking about loyalty or long-standing relationships.

Why API catalogs alone fail to deliver value

Many banks have responded to integration demands by building extensive API catalogs, but this approach creates new problems rather than solutions.

“The more API catalogs banks create, the more they risk widening the divide from corporate users,” notes Camerinelli. “These APIs exist, but corporate clients struggle to use them efficiently or build ROI from them.”

According to Datos Insights data, the challenges are multithreaded. The biggest hurdle is the underlying process and operational changes are difficult to manage, with over 50% citing this obstacle. Cost (45%) and IT dependence (41%) issues were cited next, which is expected given the complexity of a modern enterprise.

Without a strategic framework in place, banks can often find their APIs and technology stacks grow out of control. As teams can often work in silos, they risk building the same integration multiple times. The lack of reuse and increased duplication isn’t just bad for productivity. It increases maintenance costs and adds to the risk of complexity, which ultimately increases the total cost of ownership. 

Instead, banks need to think differently. They need to think beyond APIs and offer customers what they want.

Focusing on API calls is missing the point

When discussing open banking, conversations should fixate on the end users. However, research shows that corporate clients have a matrix of important capabilities. They prioritize liquidity, convenience, security, and of course, yield. But each of these elements carry different weights.

“Corporate treasurers want yield, but not at the cost of missing other priorities like sufficient liquidity, safety, and ease of use,” explains Camerinelli. “No treasurer will lose their job for missing a few extra basis points, but they certainly will if they compromise liquidity or security.”

Sethuraman adds that properly orchestrated open banking actually enhances security while delivering on these other priorities: “By opening your APIs strategically, you can embed your services into corporate ERPs. This delivers the functionality and capabilities they demand.”

Orchestrating and scaling AI capabilities in banking

Process orchestration creates the critical framework for effectively applying artificial intelligence across banking operations. This represents a shift from isolated AI applications to a cohesive approach for embedding capabilities spanning deterministic and non-deterministic processes. 

Yet in banking, there needs to be a balance of both. Mission-critical processes need to function as designed. Every time. Otherwise, there’s a risk of disruption, regulatory action, or brand impact.

Agentic AI opportunities are still plentiful in the industry that’s practically led the revolution. Having the ability to blend both gives banks the freedom to apply the right technology at the right time instead of being limited.

Orchestration allows banks to speed up deploying new models or capabilities. It prevents AI hallucination risks while creating a governance framework that helps banks accelerate innovation without compromising safety.

For example, one bank monitoring for synthetic identity fraud implemented an agentic approach that allowed their fraud team to identify repetitive patterns in certain document types without disrupting their existing processes. They could test these patterns with real data, refine their models, and gradually deploy improvements. 

By essentially A/B testing fraud models, the bank was able to reduce false positives while simultaneously improving the detection of bad actors. Something impossible with traditional, static approaches.

Building incrementally while maintaining vision

One of the most powerful advantages of process orchestration is enabling incremental modernization within a coherent strategic framework. Rather than waiting years for comprehensive implementations, banks can deliver value continuously from the start.

Sethuraman described how one multinational bank evolved from a narrow payment system implementation in one country to a 70-plus country platform vision through orchestration. Without process orchestration, they would have faced an impossible choice: wait years for a complete solution or implement disconnected point solutions.

“Process orchestration provides the flexibility to start small but think big,” he explained. “The bank didn’t wait five years to deliver value. They incrementally built their platform while maintaining a consistent vision.”

This approach requires business and IT collaboration to map the true vision, identify customer requirements, and build, buy, and blend what’s needed to achieve strategic goals. Process landscapes allow business stakeholders to create standardized process hierarchies and catalogs that IT can implement incrementally, preventing both analysis paralysis and technology sprawl.

When another audience member asked if orchestration just adds more complexity to overlapping systems, Camerinelli clarified: “Orchestration isn’t just connecting fragmented pieces. It ensures processes are properly reviewed and revised first. You’re not just automating existing problems. You’re resolving them within a coherent framework.”

The path forward

As open banking transforms commercial relationships, process orchestration provides the critical link between everything and enables rapid innovation.

When implemented thoughtfully, you can:

• Create secure connections to client systems with appropriate permissions
• Deliver enhanced functionality that meets rising expectations
• Apply AI intelligently to improve experiences while reducing costs
• Build incrementally toward a comprehensive, bank-wide transformation that reduces the total cost of ownership and enables faster scaling

Process orchestration transforms open banking from a checkbox exercise into a growth opportunity. It balances innovation with practical security measures that protect you and your clients while delivering the capabilities commercial clients actually value.

Ready to learn how process orchestration helps banks grow revenue with open banking? Watch the complete conversation between industry experts Enrico Camarinelli and Sathya Sethuraman to discover practical strategies for balancing innovation with security in open banking. 

The post How to Grow Commercial Revenue with Open Banking appeared first on Camunda.

The potential for tariff-driven increases in technology costs, particularly for advanced chips essential to AI and cloud infrastructure, adds another layer of complexity and uncertainty. As these components become more expensive, banks must be smarter about building and deploying technology to drive measurable benefits.

The efficiencies gained through AI and automation may be partially offset by rising infrastructure costs, making architectural decisions even more critical for future-proofing innovation programs.

Global realities reshape banking

The global economic landscape is fragmenting in ways that demand fundamental changes to bank operations. In the US, persistent inflation, wavering consumer confidence, and policy volatility have created market uncertainty, with the S&P down significantly from its February peak.

The “yo-yo tariffs”—on-again, off-again trade policies that recently imposed 25% tariffs on crucial technology components like chips—have intensified this commercial instability and potentially slowed GDP growth worldwide. Meanwhile, Europe and APAC are experiencing increased market confidence due to inflation tapering and stable employment conditions.

This economic divergence is driving a regulatory divergence. The US is shifting toward deregulation in certain areas (notably consumer protection), while Europe maintains and, in some cases, strengthens its regulatory frameworks. As a result of overall volatility in the US, capital flows are following, with some of the largest institutional investors redirecting funds from US investments toward non-US ETFs.

For global banks and financial services enterprises, fragmentation of process, technology infrastructure, and compliance disparity increase operational complexity:

• Settlement timelines are desynchronizing: The US has implemented T+1 settlement, while Europe won’t adopt T+1 until 2027. Additionally, NASDAQ is exploring a 24/7 trading cycle on its exchange. This, in addition to the global investment movement, is bound to lead to more operating costs in trade settlements.
• Regulatory requirements are diverging: Customer data protection rules, in particular, are creating significant operating model challenges regardless of the rigor of enforcement mechanisms. While privacy and control are top concerns for data protection, we expect the cost of managing cross-border customer data to escalate.
• Cross-border service delivery is becoming more complex: Even fundamental activities like ESG reporting now face conflicting requirements across jurisdictions. Higher operating costs will be attributed, a result of increasing complexity in everything from creating customer awareness for cross-border rules to managing accurate asset attribution to reporting.

From hub-and-spoke to regional models

Perhaps the most profound shift is occurring within bank operating models. Maintaining the traditional approach of regional front offices with global shared services for back-office functions is becoming increasingly difficult.

Previously, banks operated with something like a hub-and-spoke model. Regional differences were more in the front office and middle office, and when you converge, the shared services operations are in the back office.

With regulatory divergence between regions (T+1 settlement in the US vs. T+2 in Europe; relaxed rules in some areas vs. stricter oversight in others), the traditional scale advantages of globally centralized operations are diminishing. Banks must now build multiple, different federated environments to manage their operational needs.

Functions that were once centralized for efficiency must now be reconfigured to accommodate regional requirements while still delivering consistent customer experiences.

Adaptable foundations for a fragmented world

With the traditional operating models coming under increased stress, three critical capabilities emerge:

1. AI-powered regional scale

With traditional scale advantages diminishing, banks must leverage AI and automation to create “regional scale”—efficient operations that respect jurisdictional boundaries. The only way to build scale now without reducing margins is through AI.

This means developing region-specific AI agents that can handle processes like regulatory filings—for example, a system of AI agents only for US or EU regulatory compliance. However, there needs to be trust and guardrails before firms commit to leaving humans out of the loop.

2. Composable business and technology architecture

Banks need to replicate successful capabilities across regions while adapting them to local requirements. This demands modular processes and application infrastructures that can be assembled and reassembled for different jurisdictions.

Composability also requires scalability, as the growing volume of transactions will likely only increase as AI continues accelerating.

3. Orchestration as a fabric

Perhaps most critically, banks need sophisticated capabilities that can distinguish between deterministic processes (for example, those mandated by regulation or internal policies) and nondeterministic processes (highly dynamic). This orchestration layer becomes the connective tissue that enables adaptability while maintaining control, oversight, and most important, auditability of decisions and actions.

Adaptiveness at the core

The implications for banking leaders are clear. The age of global operational standardization is giving way to a more complex reality where local requirements drive differentiation, yet consistent customer experiences remain essential.

Success requires adaptiveness and composability to build scale without adding extra overhead and costs. This isn’t simply about technology. The change requires fundamentally rethinking organizational structures, process designs, and governance models.

Banks that recognize this shift early and build the capabilities to thrive in this “open economy, closed borders” world will gain significant competitive advantages. Those who cling to rigid global models risk being unable to adapt quickly enough to regional changes, potentially losing both market share and regulatory compliance.

The transformation won’t be easy, but the direction is clear: banking’s future belongs to those building adaptable, intelligent operations that respect regional boundaries, while delivering seamless customer experiences across a still-interconnected global economy.

For more on this topic, you can watch Sathya Sethuraman, Field CTO at Camunda, and Shane Ernest, Senior Product Marketing Manager at Camunda, discussing the issue in the video below.

The post Open Economy, Closed Borders appeared first on Camunda.

Banks today face mounting pressures

While digital transformation has been a buzzword for years, banks today face increasing challenges from demanding customer expectations, evolving compliance demands, and an ever-changing technology landscape. Our panel touched on several topics affecting digital transformation, with three major trends emerging as particularly impactful:

• The rise of AI and automation
• The shift toward open banking and modular architectures
• The growing imperative of cybersecurity and resilience.

Each of these areas presents opportunities and challenges for banks of any size.

1. AI and automation: balancing innovation with governance

Artificial intelligence is now an unavoidable topic in financial services, touching everything from customer interactions to fraud prevention. However, while AI offers potential efficiencies, it also creates significant governance challenges.

Parul described AI as a “double-edged sword,” noting, “What we need to watch out for is the challenge of how do you combine AI with current tech? How do you build the right governance around it? How do you handle the hype around AI agents?” She emphasized AI governance is the most important consideration for leadership. Banks must focus on governance to ensure responsible AI use.

One area where AI is making a significant impact is fraud detection and risk management. Min reminded the audience that AI can be leveraged for good, but it’s also being used by bad actors to create ways to defraud individual customers. “As technology innovates, it’s both sides—the commercial bank as well as the criminals—who are using that technology, and it’s becoming that much more difficult to identify, monitor, and stop risk.” This means banks must continually evolve their AI-driven security measures to outpace increasingly sophisticated threats.

AI is also transforming software development and operational processes. “I think in 2024, the hype started turning into something practical for people,” explained Michael. “We’re seeing more and more practical applications of AI technology being employed by specific business lines.” Yet, the day-to-day impact of AI on developers is still evolving.

2. Open banking and modular architectures: the path to agility and composability

The banking industry has traditionally been slow to embrace open source and modular systems, but that resistance is shifting. Open banking, API-first architectures, competition from fintechs, and continued adoption of cloud technology are driving interoperability and agility in banking technology.

Min explained that small financial institutions are benefiting from more accessible, open source technologies. “In the world of very small financial institutions, what’s driving change is that technology is more affordable, primarily through the open source side, the community-driven development.” As modular, API-driven solutions gain traction, smaller banks are better equipped to compete with larger players by leveraging flexible, cost-effective platforms.

However, regulatory concerns remain a hurdle. Even central banks remain cautious about cloud adoption due to security risks, Min noted. “Central banks are not letting their banks use cloud-based technology because they worry about all the security risks.” Despite this, the shift toward composability and open standards continues to trend as financial institutions seek to streamline operations and reduce costs while improving agility.

Parul also noted that the trend toward composability is enabling new partnerships between banks and fintechs. “Fintech used to be seen as a threat, but now you’ll see a lot of symbiotic relationships,” she explained. These partnerships—whether through hybrid models, white labeling, or private labeling—are reshaping how financial solutions are delivered, making composability, interoperability, and agility more critical than ever.

3. Cybersecurity and resilience: a never-ending battle

With financial services being a prime target for cyber threats, cybersecurity and resilience remain top priorities for banks.

As Michael pointed out, the focus has shifted from merely securing external perimeters to ensuring end-to-end security across the entire banking ecosystem. “The focus on cybersecurity has started shifting from securing the walls to securing everything within the ecosystem,” he said, emphasizing the need for investing continuously in cybersecurity education and technology.

Automation is also playing a growing role in strengthening security and resilience. Michael highlighted how automation helps mitigate risks: “If I see something that I have to do over and over again, that’s an opportunity to automate; things like scanning software, identifying threats, identifying outdated libraries.”

By deploying tools that automate threat detection, dependency management, and software security scanning, banks can improve resilience while reducing manual effort.

Actions banks can take to navigate these trends

As these trends continue to shape the banking landscape, financial institutions must take a proactive approach to transformation. The panelists agreed that a few key strategies can help banks stay ahead:

• Invest in AI governance: AI is here to stay, but its implementation must be carefully managed. Banks that can successfully balance innovation with governance will be better positioned to harness AI’s potential. Therefore, establishing governance frameworks and ensuring transparency in AI decision-making will be critical.
• Embrace open and composable architectures: Open standard, open architecture solutions are driving collaboration, composability, and interoperability. Banks should prioritize modularity to improve agility and scalability and consider partnerships with fintechs to accelerate innovation while reducing development costs.
• Prioritize cybersecurity and automation: Continuous education, automated security tools, and proactive threat detection will be essential for maintaining resilience in an increasingly hostile cybersecurity environment.
• Rationalize technology investments: Banks must carefully evaluate build-versus-buy decisions and avoid unnecessary technical debt. As Parul noted, “A huge amount of rationalization has to happen in banks” to modernize legacy systems and realize value today while preparing for tomorrow.
• Stay ahead of regulatory changes: Compliance is a key driver for change, as we’ve seen with SWIFT’s Cross-Border Payments Reporting Initiative and other initiatives. As banks modernize their core systems, adaptability to new technologies is essential.

With these strategies in mind, banks can position themselves to thrive in a marketplace that requires the ability to deliver personalized, real-time customer experiences and regulatory-compliant operations. By balancing innovation with governance, leveraging composable technologies, and strengthening cybersecurity, financial institutions can drive meaningful transformation while safeguarding customer trust.

Get more expert insights

Our panel had more thoughts to share on financial industry trends. Watch the session replay for a deeper dive into their discussion, and join us in person at the next CamundaCon to get the latest thinking from industry experts. For more insights on industry trends, read Sathya’s blog on his outlook for the financial industry in 2025.

The post 3 Key Trends Shaping the Future of Banking Technology appeared first on Camunda.

There’s a sense of urgency to modernize legacy systems, comply with regulatory demands, and manage resource constraints while maximizing the value of tech investments, such as automation, AI, ML, and RPA technologies. This highlights the need to adapt to constant change and future-proof IT investment.

Companies with a high level of digital maturity are already employing end-to-end process orchestration as the foundation required for this change. In this blog post, we discuss the current state of process orchestration, drawing insights from a survey of over 300 participants from the banking, financial services, and insurance industries, and over 800 total participants from multiple industries.

The growing divide in finance: automation and AI are on the rise, yet inefficiencies and legacy technology are still prevalent

A study from Deloitte shows that 92% of advanced automation adopters use end-to-end automation as a part of their strategy now, or plan to within the next three years. To stay competitive and meet growing customer expectations, financial institutions must leverage orchestration, automation, and AI, as reflected by our survey results.

AI and automation technologies in financial services

AI and automation technologies are on the rise in financial services, banking, and insurance.  Use cases include leveraging generative AI for creating personalized financial advice and reports, advanced AI-powered customer service chatbots, predictive analytics for risk management and fraud detection, AI in underwriting and claims processing, and AI-driven cybersecurity for real-time threat detection and response.

These advancements are significantly boosting efficiency across these industries. Yet, many—if not most—banks and financial organizations still struggle to successfully integrate them, due to their reliance on legacy technology.

Banks and financial services providers continue to face challenges with legacy systems

79% of respondents from banking and insurance said that legacy tech is keeping them from achieving hyperautomation. Transitioning away from legacy systems isn’t easy, either: 55% of respondents stated the shift from deeply entrenched monolithic platforms is a challenge at their organization.

This complication is due to several factors. First, these systems are deeply entrenched and integral to daily operations—they can’t simply be shut off without risking significant disruption to the business. Additionally, these legacy platforms often contain vast amounts of critical data and have been customized over many years to meet specific business needs, making modernization or migration projects highly complex and time-consuming.

Moreover, employees are accustomed to these systems. Transitioning to new platforms requires training to ensure they can effectively and efficiently use the new technology. There’s also the challenge of integrating new systems with existing ones, which can be technically demanding and costly.

Survey results: companies fear that increasing complexity leads to digital chaos

The widespread use of automation and AI technologies, such as machine learning, natural language processing, and RPA, leads to rapid technological advancements that introduce new complexities.

83% of respondents from banking and insurance expressed concern that a lack of control over automated systems may result in digital chaos or “automation Armageddon.” This apprehension is not unfounded, as 80% report that this lack of control has already led to an increased risk of core business processes failing to function properly.

Endpoints and components are exponentially increasing

One key driver of digital transformation is the complexity of the growing ecosystem. This leads to more connected applications, which significantly enhance functionality and user experience but also increase overall process complexity.

92% of respondents from insurance and 84% from banking said that the volume and diversity of components and endpoints across their company are increasing exponentially. Organizations in banking average about 51 components/endpoints (the highest from all industries), representing an 18% increase over the past five years.

This growth is driven by several factors. For example, nearly 70% of organizations in banking and insurance use enterprise applications, from enterprise resource planning systems such as Oracle to CRM tools like Salesforce. 67% of insurers and 65% of banks use task automation technologies, such as RPA or iPaaS. 

This complexity makes it challenging to streamline and gain visibility over operations. 85% agreed that as multiple automated tasks are combined, managing the overall end-to-end process becomes more complex.

AI and automation lead to challenges with regulatory compliance and risk management

89% of respondents (both from banking and insurance) stated that tightening regulations have increased process complexity. Managing compliance and risk becomes increasingly challenging as business processes grow more complex, digital, interconnected, and automated.

Typically, compliance teams inform lines of business about upcoming regulations and necessary changes. Business teams then collaborate with compliance and IT to implement these changes. This leads to delays and miscommunication, which can result in incorrect modifications.

Moreover, many organizations find scaling and operationalizing AI challenging:

• 84% of the insurance industry said that a lack of transparency into how AI applications and services are used within business processes leads to regulatory compliance problems.
• 94% agreed that AI applications and services must be orchestrated like any other endpoint within automated business processes to ensure compliance with regulations.

One example of such regulations is the EU AI Act, a comprehensive regulatory framework, that aims to ensure the safe and ethical use of AI across industries. It introduces stringent requirements for transparency, accountability, and risk management, adding to the complexity of compliance challenges.

An additional challenge of AI is the increasing technical debt. According to Accenture’s report, “Build your tech and balance your debt,” AI plays a significant role in this rise. Generative AI and enterprise applications have become the leading contributors to technical debt.

Misalignment between business and IT teams needs to be addressed

81% of respondents believe that having business processes locked up in “black box” legacy applications hinders their organization from achieving efficient end-to-end automation.

This also impacts communication between different departments. When business and IT teams aren’t aligned, it can significantly slow down automation projects.

• 62% of survey participants noted that business users and IT struggle to collaborate on individual processes or projects.
• 77% of respondents indicated that the lengthy process of designing and approving changes is a major bottleneck in their organization.
• 82% reported that miscommunication between teams often results in incorrect implementations or products being delivered to customers.

Companies can enhance the developer experience through effective process orchestration. Adopting open standards like BPMN and DMN helps teams visualize and simulate processes, improving collaboration and alignment. Standardization plays a crucial role in maintaining and protecting the intellectual property of processes, especially against talent turnover.

Another crucial element is composability: 94% of organizations have highlighted the importance of a composable architecture for the flexible integration of best-of-breed solutions. By reusing proven process components and safely sharing them with other lines of business and teams, organizations can customize these components to their needs, fostering a trust foundation that speeds time-to-market and enhances standardization.

Process orchestration provides companies with the intelligent, composable, scalable solution they need to tackle complexity

The increasing adoption of automation and AI technologies, alongside existing legacy systems, highlights the critical role of process orchestration in financial services. This orchestration encompasses operations, finance, and organizational culture, with a strong emphasis on business automation. The majority of survey respondents agreed that effective process orchestration is necessary to manage these complexities successfully.

• 85% of respondents agree that process orchestration is essential for digital transformation.
• 88% claim that hyperautomation cannot be achieved without process orchestration.
• 79% agree that reaching an autonomous enterprise is nearly impossible without process orchestration.

The future of process orchestration in financial services and insurance

Process orchestration is the necessary foundation for integrating automation, AI, and legacy systems. It enhances operational efficiency and ensures regulatory compliance and risk management. By adopting a robust orchestration platform, financial organizations can future-proof their operations, meet evolving customer expectations, and maintain a competitive edge in an increasingly challenging landscape.

Embracing process orchestration is no longer optional—it’s essential for thriving in the modern financial ecosystem. Institutions like Goldman Sachs, NatWest, and the National Bank of Canada have already adopted Camunda’s process orchestration to coordinate complex processes across people, systems, and devices, enhancing efficiency. These leading financial institutions recognize that digital transformation and end-to-end process orchestration go hand in hand to streamline workflows, eliminate redundancies, and leverage technology for operational excellence.

The post The State of Process Orchestration in 2025: What Does it Mean for Banking, Financial Services, and Insurance? appeared first on Camunda.

Anyone who watched the markets in early 2025 when DeepSeek—a relatively unknown player in the AI space—announced they had built something remarkable. They’ve built an AI model that could match the capabilities of tech giants who had spent billions—but at a fraction of the cost. The announcement wiped 3% off the Nasdaq in a single day, and removed $600m in value from Nvidia alone. Before the ripples could settle, Alibaba claimed their models could outperform DeepSeek’s, sending fresh waves through the market.

The LLM shakeup, coupled with the recent announcement of 25% tariffs on advanced chips, exemplifies the challenges banks face in 2025. How do you maintain resilience and customer focus when technology and market dynamics shift dramatically overnight?

Three pressures reshaping banking priorities

Banks are grappling with three interconnected pressure points reshaping their operational landscape. 

First, customer expectations continue to evolve beyond traditional personalization. Today’s clients demand products that align not just with their life stage but with their precise moment in life—all while banks face mounting pressure to optimize efficiency and manage costs as rate cuts look slow or entirely unlikely. With the headwinds of slow rate cuts in the US and continued inflation, balancing these two priorities will be a challenge that requires new approaches.

Second, we’re witnessing a significant divergence in regulatory approaches to operational resilience. While Europe implements increasingly structured oversight through initiatives like the EU’s AI Act, the United States’ new administration is moving toward a model of self-governance. This regulatory bifurcation creates unique challenges for global institutions that must maintain operational consistency across different jurisdictions.

Third, the technology infrastructure landscape is becoming more complex and costly. The introduction of 25% tariffs on crucial components like chips affects everything from AI deployment costs to Cloud infrastructure expenses, eroding efficiency gains that banks were counting on from their AI investments.

Building a resilient and adaptable foundation

The path forward requires a balanced approach to operational transformation. The answer lies in developing what might be called a “customer-cost-centric transformation” approach. This isn’t just about balancing customer experience with efficiency—it’s about fundamentally reimagining how banks deliver value in an AI-driven world.

A recent incident at a major bank illustrates the challenges. An executive assistant used an internal AI copilot to summarize confidential board discussions. Yet they only realized later that the summary would be accessible to all employees—including interns. 

This near-miss with potential insider trading exposure underscores a crucial point with the rapid pace of AI deployments. Responsible AI implementation requires sophisticated governance frameworks that balance capability with control. Focusing too much on either side will ultimately lead to an equal or greater risk to organizations.

The path forward: Three strategic imperatives

Create a cohesive, open ecosystem

The evolution from open banking to open finance, and now to a future of an “open economy,” requires a more sophisticated approach than basic connectivity. Banks must have an ecosystem mindset and create a platform approach to handle the complexity and increasing scale. They also need to be flexible and composable enough to respect increasingly distinct regional boundaries while enabling collaboration and iterative innovation. 

This means building a platform that enables the reusability of infrastructure and tech investments while operating differently in various jurisdictions. For example, supporting specific API and data sharing policies in regions like Europe while enabling more controlled data exchange in others. 

The goal isn’t universal openness but a strategic platform approach that helps banks grow and delight customers while improving costs to serve them.

Blend deterministic and non-deterministic processes 

Many firms are stuck “planting 1000 flowers” of AI experiments trying to find what brings the most value. Banks must clearly differentiate between operations that require consistent, deterministic outcomes and those where AI can provide valuable supplementary support. This distinction helps optimize investments while maintaining appropriate control over AI deployments and how they operate.

The flexibility to blend agentic AI with deterministic flows enables firms to increase their overall automation rate and free capacity so employees can work on higher-value—and ultimately—more human-centric activities. Simply put, you can model the portion of your process that requires predictability and control. Then let AI agents handle work that is more dynamic in nature.

Build enterprise-scale deployment models

As AI becomes more deeply embedded in banking operations, governance frameworks must evolve beyond basic risk management to comprehensive operational controls. This includes everything from data access protocols to model deployment strategies and ethical considerations.

Additionally, they need the flexibility to swap out models with ones that offer new value, whether that’s lower cost or improvements in accuracy or speed. Balancing these opposing forces will be a continuous challenge, reinforcing the need for adaptability and composability.

Looking ahead

The successful banks of tomorrow will be those that can build technology platforms capable of absorbing market shocks while keeping the business moving forward. While technology is an important ingredient, it demands a fundamental rethinking of operational excellence and business resilience

As we progress through 2025, banks need to focus on developing flexible, agile process platforms—systems and processes that can evolve without compromising stability or compliance. This means investing in infrastructure that supports both current needs and future possibilities while maintaining the right balance of governance and freedom to innovate.

The challenge isn’t predicting every potential market disruption. That’s nearly impossible (even if we were three for three in this episode!). It’s building a technology foundation that can adapt to unexpected changes while delivering value today and sustainably into the future. 

For banks that get this right, the reward will be the ability to turn future tsunamis into surfable waves, maintaining operational excellence even as the storms rage on.

Want to see how these trends are playing out against the original predictions? Read Financial Services Industry Outlook & Guidance for 2025 for a deeper look at Sathya’s predictions for what will shape the industry in the coming year.

Explore Camunda for Banking and Financial Services to learn more about how leading banks are building resilient platforms to operationalize AI and iterative innovation.

The post When a Pebble Creates a Tsunami: Banking’s New Reality in 2025 appeared first on Camunda.

As financial institutions update their infrastructure to support growing customer demands for “real-time everything,” they should map out an approach to achieve compliance with current standards. These institutions also need to create a foundation that allows them to adapt to new and changing market and regulatory requirements.

Current Open Banking initiatives need to have an eye on the future

Current Open Banking regulations center on secure data sharing, as customer data is the fuel that powers new, collaborative consumer offerings. In response, to comply with regulators and compete in the market, major banks are updating their enterprise systems to improve how customer data is collected, authenticated, stored, and shared. IT teams are also building catalogs of APIs that enable third parties to connect with and use a bank’s customer data, and special portals that allow third-party developers to access these APIs.

These advances bring new challenges. New financial services, such as embedded finance products and real-time payments, introduce more complexity into banking operations. As a result, IT staff now have the additional tasks of building, maintaining, and governing an institution’s ever-growing catalog of Open Banking APIs.

As banks  move forward with re-architecting their systems for Open Banking, they will be continually challenged to modernize system capabilities in response to more regulations and emerging technology. For example, in 2026, the European Union’s Payment Services Directive 3 (PSD3) is expected to come into force. It will include new rules to improve fraud protection and customer rights. It will also increase competition and consumer choice by allowing non-bank payment service providers access to payment systems.

These and future directives have the potential to completely change the way consumers pay for goods and services and could upend conventional banking and payment processes. In some cases, banks may need to show compliance with new regulations within as little as 18 months of enactment. Timelines will challenge leaders who are already managing multiple, parallel digitization and modernization projects geared toward operational efficiencies and customer experiences.

That’s why, instead of solving for each new directive and regulation as it comes online, forward-looking leaders are thinking about how to transform operations beyond ticking the boxes for compliance. They’re preparing for the future with a strategic approach to banking innovation that will help them remain competitive in the market and is centered on a resilient platform.

Prioritize these five core capabilities for strategic transformation

IT leaders committed to modernizing enterprise systems and supporting the next generation of Open Banking should think holistically about how best to capitalize on regulatory changes, in order to improve enterprise agility and scalability and expand opportunities in the marketplace. They should extend their vision from building application tools to designing adaptable, collaborative ecosystems that make it easier to co-create secure, digital solutions that provide better, value-added benefits to consumers. APIs, microservices, and cloud-based solutions will continue to be essential components of this ecosystem.

We recommend IT leaders make a holistic assessment of their enterprise operations and prioritize ways to improve competitive resilience in the following five areas.

Collaboration

In the Open Banking era, adaptability to new customer demands will require internal teams, service providers, and third-party partners to strategically collaborate on and deploy new products and services as quickly and efficiently as possible—a difficult task. Often, business logic is hidden in code, trapped in legacy systems, or is undocumented “tribal knowledge.”

The lack of visibility prevents alignment between IT and business teams and can slow time to market. IT leaders will need tools that bring end-to-end visibility and alignment to complex processes so fusion teams can quickly understand, maintain, and optimize them.

Action item

Support alignment across internal and external teams with common visual models using a standards-based notation such as BPMN and DMN. This one model approach is used across industries and easy to adopt. It allows stakeholders to build visual representations of complex processes, illustrating every interaction in the journey. It also simplifies the versioning, maintenance, optimization, and reusability of the foundational process models to preserve your intellectual property to ensure business continuity regardless of talent turnover.

This approach also supports stronger CI/CD integration, giving teams the ability to improve existing experiences and get new products to market faster without interrupting the rhythm of business.

Open design

As the term Open Banking suggests, openness is key. That means ensuring flexibility to integrate with any people, systems, or devices to maximize resources and use best-in-class solutions and partnerships to advantage. IT leaders will need to ramp up the transformation of legacy, point, and monolithic technologies to open systems that support partnerships, provide end-to-end process visibility, and help teams deliver faster.

Action item

Continue to revamp the enterprise architecture to phase out legacy systems and siloed solutions and replace them with flexible technology that is language-agnostic. This helps development teams reduce efforts by using their preferred tooling, APIs, and Connectors to build solutions that connect the people, systems, and devices that power mission-critical operations.

Composability 

In this next era of Open Banking, banks will need the capability to anticipate and rapidly respond to dynamic customer demands with differentiated services. The ability to build and reuse process components in multiple ways can help banks increase speed to market and lower development costs. This is especially helpful for banks that support multiple processes (e.g., consumer, commercial) and operate in multiple regions (e.g., the US, EU, and UK).

Action item

Use a process orchestration and automation platform like Camunda to build process components once and reuse them in multiple processes to reduce efforts and speed up deployment cycles. With process orchestration as a foundational layer in the tech stack, banks can maximize existing resources and customize any workflow to fit specific needs. Process orchestration unlocks value from existing IT investments and helps banks use composable capabilities to quickly respond to changing market and regulatory requirements.

Intelligence

As AI and automation rapidly advance, banks need the ability to leverage vast amounts of financial data and analytics with integrated intelligence to deliver personalized customer experiences and optimize banking operations. Banks also need to provide regulators with transparency in their operations, especially as AI comes under greater scrutiny globally.

Action item

Include a tool in the enterprise tech stack that can orchestrate and rapidly deploy AI services and machine learning models across mission-critical business processes from end to end. It should provide visibility into how machine learning and AI are applied and provide an airtight audit trail of every action and decision for every process.

This visibility also allows banks to use AI-based analytics to uncover opportunities to continuously improve and transform banking workflows.

Scalability and resilience

With annual growth from Open Banking projected at 20% or more over the next decade, banks can stay competitive by simplifying their complex technology ecosystems to improve agility, streamline operations, and execute any process at scale. This is veryimportant for banks running processes that must comply with multiple regional standards and data differences across implementations. And, of course, high availability, security, and resilience to support digital operations is paramount.

Action item

Adopt a cloud-based workflow engine that supports an event-based architecture for low latency processes such as payments and long-running processes such as disputes or claims that can take months to complete. Ensure the engine is flexible to deploy in cloud, on-prem, and hybrid environments to support experimentation with new business models and processes without limitations.

Opportunities in Open Banking are accelerating—are you tech-ready?

Open Banking is reinventing the banking industry. In response, banks must rethink their business models and enterprise systems to support the new reality. Those that do will be competitive players in a new era of banking with a value creation opportunity estimated up to $20 trillion.

Success will require new, strategic thinking, new business models, and agile go-to-market capabilities. The banks that will win in the next era of Open Banking will develop a strategic approach to delivering seamless, personalized experiences through advanced analytical decision-making, open and composable systems, robust process orchestration, and automation. Monolithic, legacy tech will be more of a blocker than ever, which is why institutions with an eye toward the future are doing the hard work now to revise enterprise architectures for agility, security, collaboration, and speed.

Today’s APIs, microservices, event-driven architectures, cloud platforms, and user-friendly development tools are a start. They will help accelerate innovation, as will a growing offering of AI-based tools and services.

But to lead in the next era, banks will need a holistic view and roadmap for breaking down their operational silos and connecting and orchestrating the tools, tasks, processes, workflows, data, AI, and people needed to deliver differentiated, market-leading customer experiences over the long term.

Learn more

Lead the Open Banking revolution by delivering differentiated products and experiences with greater control and speed at enterprise scale. Camunda’s open, standards-based platform bridges business, IT, and third-party providers to collaboratively build unique, high-performance processes for the products and services that customers demand.

Whether orchestrating real-time cross-border payment workflows, offering white-labeled services to a new brand, or expanding into underserved markets, Camunda provides a foundation for customer-first innovation.

The post Next-Era Open Banking: Think Beyond the Basics to Lead the Industry appeared first on Camunda.

Two important factors are contributing to this evolution: a shift in mindset by banking leaders that data is a collaborative resource instead of a guarded secret; and the ongoing modernization of enterprise systems from monolithic platforms to cloud-native, composable architectures. Both present challenges for enterprise architects working to create more open, interconnected systems. Process orchestration can help manage these challenges and transform core banking systems for the Open Banking era.

IT leaders should prioritize these capabilities to future-proof operations for the Open Banking era

For enterprise architects, Open Banking is about balancing innovation with compliance and operational efficiency. That’s not easy to do when faced with a complex web of emerging technology alongside underlying IT architecture that may still be running critical components on legacy systems, including mainframe.

These systems were not built to interact with modern APIs or Open Banking frameworks, making integration difficult. They also may lack robust authentication, monitoring, and security mechanisms necessary for secure data sharing, as well as real-time processing capabilities.

And modern systems present their own challenges with siloed processes, hidden business logic, and varying data schemas that prevent integration. In short, banks have a lot of work to do to transform their architectures and capitalize on Open Banking opportunities. It’s more complicated than just offering new APIs.

To simplify the complexity inherent in the core banking processes and establish a future-ready framework for Open Banking, we recommend tech leaders start by prioritizing the following capabilities:

Of course, the next step to achieving success in Open Banking is being able to coordinate all of these capabilities into a seamless, strategic workflow. Process orchestration is the best tool for this task.

Process orchestration helps transform Open Banking capabilities into strategic products and services 

Process orchestration is an essential tool for integrating, automating, and optimizing processes as part of Open Banking initiatives. It empowers seamless integration and automation of multiple application components from end to end and brings visibility into those processes from start to finish—which is crucial in the banking industry for operational transparency, auditing, and compliance.

The transparency enabled by process orchestration also encourages new ideas through collaborative development. For banking technology leaders, it can create an opportunity to collaborate with business leaders to reimagine financial services, break down existing limitations, and create more inclusive, efficient, and customer-centric financial experiences through the strategic use of technology.

For example, consider the following potential use cases for process orchestration in Open Banking:

• Operationalizing AI: Every firm wants to get ahead of the trend but often struggles to deploy AI solutions and prove their value. Process orchestration can help speed up experimentation so you can iterate faster and unlock the value of emerging technology in ways that help you stand out. As an open platform, you can deploy new AI-infused processes faster because it fits within your existing software development lifecycle, can integrate any technology—whether homegrown or third party—and works with any programming language and deployment model.
• Smarter lending: Faster credit risk assessment is possible by using real-time access to transaction and account data. Process orchestration integrates workflows across banks, third-party providers, and credit agencies to aggregate multiple data sources and determine creditworthiness in real time. Orchestration coordinates the end-to-end journey from application submission through verification, underwriting, and payment, reducing manual effort and accelerating decision-making. As a result, consumers have faster access to tailored loan options and banks can better convey trust and security in the process.
• Optimizing payments: Real-time payments are a growing trend globally. Process orchestration coordinates the end-to-end flow from initiation through settlement. This involves reliable and secure integration between banks, third-party providers, and payment networks. Orchestration enables real-time data exchange and seamless payment processing. It also manages error handling, transaction tracking, and reconciliation with full visibility. By streamlining these processes through orchestration, banks can better leverage payment data to improve other areas of the business like financial crime.
• Mitigating financial crime: Orchestration enables you to take a multi-vendor strategy by weaving together a variety of technologies—such as homegrown fraud models and third-party fraud detection platforms—as part of your end-to-end due diligence workflows. Banks then have more freedom to move from periodic to perpetual monitoring to help mitigate financial crime and improve risk posture. It helps analyze, identify, and stop bad actors early and provides rich data for faster investigations by securely aggregating data from various sources.  
• Personalized financial products: Process orchestration automates and streamlines workflows that analyze customer data and match individuals with tailored financial solutions for insurance, loans, and investments based on transaction history. It integrates data from multiple accounts via secure APIs, ensuring compliance with Open Banking regulations, and manages tasks like customer profiling, creditworthiness assessment, and product recommendations in real time. By enabling seamless data exchange, process orchestration helps financial institutions respond to individual needs, which improves customer satisfaction and drives better financial outcomes.

These are just a few of the potential use cases for process orchestration in Open Banking. In such a rapidly evolving banking and technology ecosystem, however, the potential could be limitless.

Success in Open Banking will require IT to lead the way with agility and innovation

Open Banking products and services have the potential to generate new revenue through more innovative, customer-centric experiences. However, to realize that potential, IT leaders will need to champion programs to rapidly modernize legacy systems, enhance data security, and adapt to increased operational complexity.

The key competitive advantage in the next banking era lies in creating composable banking frameworks that can seamlessly orchestrate and automate processes from end to end with unparalleled control and transparency. IT leaders will be challenged to lead initiatives to overcome their bank’s complex technology ecosystems and legacy limitations, plus align internal and external teams to future-proof operations and continuously adapt.

Financial institutions that achieve the most success will be led by those who leverage tools like process orchestration to deliver differentiated products and experiences with greater control and speed at enterprise scale.

Learn how Camunda can help your institution scale innovation in banking and financial services. Schedule a custom demo today.

The post It’s Time to Future-Proof Your Open Banking Infrastructure with Scalable Process Orchestration and Automation appeared first on Camunda.

Traditional banks see Open Banking as an opportunity to collaborate to grow market share, improve customer loyalty, and create new revenue streams. But to achieve those goals, the C-suite and other executives need help breaking down the operational silos that prevent innovation, growth, and successful programs.

Industry experts like Deloitte suggest that “any financial services firm wishing to participate successfully in this new environment will need to go through a radical review of its long-term strategy, as well as its technological and operational capabilities.”

Complexity and misalignment are holding banks back

Years of digital upgrades have created a tangled technological landscape that siloed core banking operations. What began as well-intentioned efforts to modernize legacy systems resulted in a complex network of legacy, bespoke, and modern systems that trap data in silos and don’t communicate effectively with each other. This technological maze makes it difficult for banks to beagile in a volatile market.

Even after decades of digital transformation upgrades, many banks still struggle to unify customer account data and coordinate processes from end to end within their own systems, let alone a third party. Banks eager to expand into Open Banking need to untangle their digital knots and reimagine how technology can truly support—rather than complicate—their business goals.

Complicating things further is the misalignment between business and IT teams. Getting everyone on the same page within such a complicated and interconnected tech ecosystem slows banks down and can even result in rolling out the wrong features to customers. According to a recent study of 800 IT and business decision-makers, 82% say miscommunication between teams leads to the wrong thing being built. Process orchestration can help simplify system complexity, improve collaboration between business and IT teams, and unlock the right Open Banking opportunities.

Unite strategy and execution with process orchestration

Process orchestration is designed to coordinate diverse technologies and tie together your most critical—and often complex—business processes. It plays a pivotal role in connecting, automating, and optimizing Open Banking workflows because it can orchestrate moving parts from end-to-end across disparate systems, people, and third parties.

As digital demands increase, having a scalable and flexible platform as your foundation will be crucial to achieving your transformation goals. It will enable you to turn strategic vision into operational reality while being able to maximize the investments you’ve made in technology and teams.

Banks are using process orchestration to drive key Open Banking capabilities, including:

• Strategic partnerships and differentiation: Process orchestration helps to bring together the diverse financial ecosystem. By securely connecting and opening up your core banking systems to third parties, you can forge profitable new partnerships with fintech and non-financial firms that help expand your market share and add new revenue streams.
• Operational excellence and resilience: High-quality, timely data fuels Open Banking and other innovation initiatives. Process orchestration helps ensure accurate, real-time data sharing across platforms with complete visibility from end to end. Not only does this improve risk management and compliance oversight, it also helps you find areas for optimization—whether for cost reductions or to improve customer satisfaction scores. Ultimately, you’re able to create and ship new products and deliver better experiences for your customers and the employees who serve them.
• Future readiness and agility: Process orchestration provides a platform for agility required by any forward-looking bank. The inherent composability enables you to reuse and modify process components to improve standardization and speed up deployment cycles. Whether you’re expanding into new markets, taking advantage of new technology, or launching new value-added services for your customers, the platform ensures you can move faster with lower risks.

Most important, process orchestration provides a foundation for the flexibility required to navigate a dynamic global market where customer demands, emerging technology, and regulatory requirements are constantly shifting. Ultimately, it helps banks unite their strategic vision with their technical reality so they can get the most value from their investments and deliver unique, differentiated services and products faster.

BNY is an example of a long-established bank that uses process orchestration and automation to enable Open Banking capabilities. For example, their client-facing SaaS data platform (Data Vault) gives clients the ability to access data and analytics from a multi-tenant, public, cloud-based application. The platform is designed to ingest structured and unstructured data from multiple sources such as vendors, clients, order management systems, and accounting platforms by streaming, sharing, or batch processing and then transform it. A data virtualization layer allows clients to query across multiple data stores. The Data Vault platform uses a microservices architecture to securely expose different services with which clients can build an application or feature. Process orchestration is the capability that makes it possible for BNY to coordinate and automate all of the platform’s services for multiple, simultaneous users.

Future-proofing Open Banking ecosystems with process orchestration and automation

As banks undertake more Open Banking initiatives, they will face increased demands, new compliance standards, and expanding partner ecosystems. Process orchestration can help banks adapt to these changes by fostering agility and resilience. That’s why CIOs and CTOs consider process orchestration a critical investment to stay competitive in the Open Banking era and why they are choosing Camunda’s universal platform for process orchestration and automation as the orchestration and automation layer in their Open Banking frameworks.

Camunda is designed to integrate and scale to meet business and performance needs. The open, standards-based platform bridges business, IT, and third-party providers to collaboratively build unique, tailored experiences that customers demand. Its composability enables teams to design once and reuse process models, decision tables, Connectors, and other components in multiple ways. These capabilities help banks speed time-to-value and innovate without compromising on quality or control.

Building a connected, customer-centric future in Open Banking

The next era of banking will be defined by Open Banking. As Deloitte experts see it, “There is little doubt that markets believe that Open Banking, closely followed by a broader cross-industry data sharing ecosystem, is the way forward.”

Traditional banks can compete with fintechs and neobanks in this new era if they can modernize and transform their internal systems to be engines for growth. Banks that succeed will not be defined by their traditional assets but by their ability to rapidly adapt, integrate, and innovate. They will be the ones that build agile, interconnected financial ecosystems that can pivot instantly to changing market demands and customer expectations.

Learn how Camunda can help your institution scale innovation in banking and financial services. Schedule a custom demo today.

The post Building the Connected Bank: Why Collaboration and Orchestration are Key to Succeeding with Open Banking appeared first on Camunda.