Visa’s Pismo Says AI Has Exposed Banking’s Old Tech Problem

IT Budget Allocation

70%

Percentage of IT budgets often devoted to maintaining outdated systems.

Customer Accounts Migrated

320,000

Number of customer accounts migrated by Thailand-based FinTech T2P to a cloud-native platform in three months.

Users Supported

1,000,000

Number of users supported by Denmark’s Lunar Bank using Pismo infrastructure across Nordic markets.

§ 01 Executive Snapshot

What: Visa's Pismo discusses the challenges posed by legacy systems in modern banking due to rising demands for AI-driven solutions.
Who: Leonardo Collado, Senior Vice President and General Manager of Pismo, a Visa solution.
Why it matters: The discussion highlights the urgent need for financial institutions to modernize their infrastructure to meet new customer expectations and leverage AI technologies effectively.

Legacy systems, while foundational, are increasingly inadequate for modern demands such as real-time payments and AI-driven decision-making.
Approximately 70% of IT budgets are often spent on maintaining outdated systems, limiting innovation capacity.
Pismo advocates for incremental modernization of banking infrastructure, allowing institutions to transition without disruptive migrations.

Historically, banking systems have prioritized stability and endurance, but this approach is being challenged by the rapid evolution of customer expectations and technology.
The increasing integration of AI into banking is reshaping the competitive landscape, compelling both incumbents and challengers to reassess their operational frameworks.

Immediate implications include the need for banks to adapt quickly to avoid losing customer loyalty, as speed and personalization become primary drivers of trust.
Long-term, the modernization of banking infrastructure may redefine competitive dynamics in the financial sector, prioritizing agility and customer-centric strategies.

Potential risks include the high costs associated with maintaining legacy systems and the operational risks involved in large-scale infrastructure migrations.
The complexity of existing systems may hinder the ability of institutions to implement necessary updates and innovations effectively.

Key developments to watch include the ongoing adoption of AI technologies in banking and payments, as well as the progress of institutions in modernizing their infrastructure incrementally.
Future indicators of success will involve customer satisfaction metrics and the ability of institutions to deliver personalized, efficient services in real-time environments.

§ 07

What challenges do legacy systems pose in modern banking?

Legacy systems are increasingly inadequate for demands like real-time payments and AI-driven decision-making.

Why is it important for banks to modernize their infrastructure?

Modernizing infrastructure is crucial for banks to meet new customer expectations and leverage AI technologies effectively.

How does Pismo suggest banks transition to modern systems?

Pismo advocates for incremental modernization of banking infrastructure, allowing institutions to transition without disruptive migrations.

What are the risks associated with maintaining legacy systems?

The risks include high costs and operational challenges in implementing necessary updates and innovations.