At the 2024 CamundaCon in New York City, a panel of banking technology experts explored the major technological and regulatory trends shaping financial services. Contributing to the discussion were Michael Goldverg, managing director and distinguished engineer at BNY Mellon; Parul Ghosh, distinguished engineer at Wells Fargo; Min Tha Gyaw, board member for the Mifos Initiative and chief strategy officer of ThitsaWorks; and panel moderator, Sathya Sethuraman, Camunda’s field CTO for financial services.
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.
Start the discussion at forum.camunda.io