The great AI migration: why customer real-time demands are driving banking transformation

In banking, every millisecond counts. Customers today expect hyper-personalization, instant information and rapid responses from their banking providers. Yet for many banks, the path to a better, faster, and more agile service is obstructed by a formidable challenge: migrating to a new core that can deliver the experiences that customers now demand.  

Banking executives recognize the importance of the next great migration. In a recent survey commissioned by 10x Banking, 93% of banking executives say their company’s future success depends on choosing the right core solution, while 42% identify data migration as a top barrier to transformation. Meanwhile, nearly 70% express concerns about the risks of undertaking such a monumental task. It's a complex, high-stakes process, and for many, the fear of failure outweighs the need for action. 

The challenge is multi-faceted: managing the complexities of integrating legacy systems with modern architectures, ensuring data security and compliance during the transition, and minimizing disruption to daily operations.

And yet, migration does not have to be risky. With the right tools, migration to a cloud-native core banking solution can be a seamless process, unlocking real-time capabilities such as instant fund transfers and transactions, provision of real-time account information, and dynamic customer response with personalization baked into the digital experience. 

The consequences of a bank not migrating and not delivering on these customer expectations are already apparent today with the rise of challenger banks over the last decade. Yet many banks have chosen to focus their innovation on front-end customer experiences like banking apps and websites. But over time, the legacy back-end tech stack will restrict banks from delivering the products and experiences they want to give their customers. It creates an internal operational barrier that dictates how much flexibility, control, and insight banks have. And how much of this they can pass on to customers. In 2025, as customer expectations accelerate with AI, a failure to adapt may result in a business-critical risk in the next few years.  

AI will help path the way to migration

AI has profound implications for banking, way beyond customer service agents and smarter chat interfaces. A new generation of Generative AI will soon help banks overcome the hurdles of migration – for example, TerraAI is already using modern data engineering practices and AI to support financial institutions to successfully handle data migrations, document handling, reporting, and financial reconciliations. Solutions like this are proliferating on the market, and Generative AI will fast become indispensable in the pursuit of successful transformation.

By decoding and analyzing complex legacy systems, AI can create digital twins and simulate migration pathways at scale. It can then validate and optimize the best paths quickly and affordably, offering banks a fast track to transformation that minimizes risk and cuts costs. In the near term, we will begin to see faster, smarter migrations to next-generation cores and as a result, the creation of a wave of banking products and services that set a new bar for innovation and customer experience.

This matters because customers expect more than ever. They expect competitive foreign exchange rates when traveling, better returns on savings and frictionless digital experiences that work wherever they are. Banks must adapt not only to meet these expectations but also to reduce cost-to-income ratios, making it feasible for them to deliver compelling products at a price point that works for business and customer alike. 

AI at the core 

Migration today is vital. Banks must adopt a more modern core that can provide real-time, AI-ready data to supercharge product innovation, drive new customer experiences and reduce cost to serve. With modern next-gen cores already on the market and new AI migration tools emerging, banks can move forward without the fear of downtime, setting themselves up for a future that’s agile, resilient, and ready for AI-accelerated growth. 

Banks must not be content with innovation at the edge – AI must be adopted at the core. The future of banking is one of immediacy and intelligence, where customer demands are met in real time and new products are deployed with agility. Core banking transformation is the cornerstone of a new AI-enhanced future.