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For most banks, the ambition is not the issue. They want customers to move smoothly across mobile, web, branch, ATM and contact centre. And with every interaction informed by a consistent view of the relationship. Yet that ambition continues to break down in execution.

The biggest reason for this is not a lack of digital intent, but the continued weight of outdated core systems. In 2026, omnichannel banking is still being constrained by technology stacks built for a different era. Outdated architectures are designed around products, batch processes and isolated servicing environments rather than real-time, customer-led journeys. Banks may have modernised their interfaces, but too often the core operating model underneath remains fragmented. And slow to change and difficult to integrate.

That is why legacy infrastructure remains such a strategic issue, with outdated core systems doing more than increasing cost. They make it harder to connect channels. Harder to surface the same customer context everywhere. And harder to deliver the continuity that customers now expect as standard.

Technical debt is slowing digital transformation across the sector

Many institutions are still operating with tightly coupled platforms, heavy customisation, overlapping middleware and years of point-to-point integrations. That accumulated complexity and technical debt means even relatively modest change can take too long, involve too many dependencies and introduce too much risk.

Banks may continue launching digital features, but when the underlying estate is burdened by technical debt, progress becomes uneven. New capabilities are layered on top of fragile foundations, and where customer journeys improve in one channel, they break in another. Data remains inconsistent and frontline teams lack a joined-up view.

The result is a form of transformation that is visible on the surface but limited underneath. There is activity, but not enough structural change to support true omnichannel delivery at scale.

Channel silos are the customer-facing consequence of legacy design

When a customer journey started on mobile cannot be completed seamlessly in branch, or a customer updates information in one place and it’s not reflected everywhere else, this is where frustration sets in. In 2026, customers compare their bank with the best digital experiences they encounter anywhere. They expect continuity, speed and relevance across every touchpoint. Whether they are using an app, speaking to an adviser or carrying out a self-service transaction.

That raises the bar considerably, and means digital transformation can no longer be measured only by channel availability or app functionality. The real test is whether the experience feels connected.

If the customer has to repeat information, restart a journey or switch channels without continuity, the bank has not delivered an omnichannel model in any meaningful sense. It has delivered multiple channels that still operate in parallel. Customers don’t experience the bank as a set of internal systems, they experience one brand and one relationship. When channels don’t share context, the bank appears fragmented, regardless of how much it has invested in digital. Fragmented data and channel silos are therefore not simply architecture issues. They are customer experience issues with direct commercial and reputational consequences. That is why omnichannel banking should be treated as a strategic priority across the business, and shouldn’t sit as an IT responsibility alone. It is not only about channel availability, but about whether the organisation can create a coherent service model across digital, self-service and human-assisted touchpoints.

A sector dividing into haves and have-nots

This challenge is also reshaping the competitive landscape in a more fundamental way. The banking sector is fragmenting into haves and have-nots. And the fault line runs directly through the question of physical infrastructure and legacy dependency.

Nearly all neobanks and digital challengers were built without physical infrastructure. For physical delivery channels, they rely almost entirely on third-party providers, and that gives them a structurally lighter cost base and, critically, significantly less technical debt than their incumbent counterparts.

But this structural advantage comes with its own constraint. Because neobanks operate almost exclusively through digital channels, they have far less need for true omnichannel capability in the first place. The omnichannel problem arises precisely because traditional banks have physical touchpoints to integrate. Neobanks, unburdened by that estate, sidestep the complexity but also forgo the depth of relationship that genuine multi-channel service can support.

What established banks can do is use the very complexity that defines their position as a differentiator, delivering the kind of seamless, contextually rich, multi-channel service that digital-only players are structurally unable to offer. That, however, requires getting the omnichannel foundation right. Which is precisely why legacy modernisation is not simply a technology programme, it is a competitive imperative.

Banks are innovating around the edges, and in many cases that is the right approach

Banks know they need to reduce dependence on legacy technology, but full infrastructure replacement is rarely realistic. Core banking environments are deeply embedded in products, controls, processes and regulatory obligations. They support high volumes, critical services and decades of accumulated business logic. Replacing everything in one move is usually too risky, too expensive and too disruptive to be the most credible route forward.

This is an important point because the modernisation debate is often framed too narrowly, whereby banks should either preserve the old estate or replace it outright. In practice, most banks cannot afford that binary choice. What they need instead is a disciplined approach to modernisation. One that accepts the realities of the estate while steadily reducing dependence on its most restrictive elements.

The most effective institutions are not waiting for a single, large-scale replacement event. They are innovating around the edges of the legacy core by introducing integration layers, service layers and orchestration capabilities that allow better experiences to be delivered now.

This approach matters because it enables progress without requiring immediate wholesale replacement.

By using APIs, reusable services and modern integration patterns, banks can decouple channels from some of the constraints of the underlying core. That makes it possible to improve digital journeys, strengthen self-service capabilities and support better assisted experiences in branch and contact centre environments, even while the core remains in place.

This is often where the most practical momentum comes from. A bank may not be able to replace the whole stack in the near term, but it can improve onboarding, authentication, servicing flows, cash access and assisted digital interactions by creating a more flexible service layer around the legacy environment.

That does not eliminate the long-term need for deeper simplification. But it does give banks a way to move forward credibly, improve customer outcomes and reduce operational friction while larger structural changes are planned over time.

Modernisation must be continuous

Legacy reduction is not a single destination. It is an ongoing capability. Banks need to modernise in ways that make future change easier, not just solve today’s bottlenecks. That means progressively simplifying architecture, improving data accessibility, reducing duplication and building operating models that support continuous adaptation.

The strongest banks will be those that treat transformation as cumulative. Each phase should lower complexity, improve agility and strengthen the bank’s ability to connect customer journeys across channels.

Banks do not need to replace everything to make meaningful progress. But they do need to be honest about what is holding progress back. The institutions that lead from here will not be the ones with the loudest transformation rhetoric. They will be the ones that modernise pragmatically, connect channels effectively and make continuous change part of how the bank operates.

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Embedded Finance
Neobanking

Everyday customer interactions with ATMs or ASSTs to withdraw cash or check their account means these touchpoints emit hundreds of thousands of data points per day. This data holds the answers to how customers interact with those end points and how they are performing. However, currently this data is not being fully analysed or harnessed at all.

Data Analytics

This is surprising when you consider how better data analytics is widely understood to be crucial to enable banks to stay ahead of the competition. Indeed, one major study found that nearly half (48 percent) of banking executives globally agreed on this. However, many do little with it. The data which is harvested from the self-service banking network, including ATMs and ASSTs, is a critical way for banks to lower their operational costs. At the same time it can improve their offerings and increase their bottom line.

Real-time data collection and analysis is more than just critical for managing operational costs. It also plays a significant role in how banks realise their omnichannel ambitions to improve customer engagement and experience. For this to be successful, banks must leverage tools which provide actionable insights into performance across a number of channels including in-person services, ATMs, online and apps. The insights which are collected on these channels provide a complete and integrated picture of banking performance across all touchpoints.

Actionable Insights from Data

No matter how a customer interacts with the bank, every touchpoint provides large amounts of data which can be collected, sorted, and analysed for actionable insights. However, taking this information from raw data and transforming it into valuable insights is a challenge for many financial services organisations.

To do this, it involves strong data management and analytics processes and end-to-end mapping of all self-service banking channels, in-person and online. Real-time insights are also key to understanding how the network is performing and how customers are interacting with the endpoints. Importantly, this information must be easily accessed throughout the organisation. Doing this will enable the bank to identify if there are any inefficiencies or issues throughout the network which can be fixed swiftly, with minimal disruption to services.

Significantly, with real-time monitoring, banks can see any attacks on their services or endpoints from threat actors. The sensors are not only on the ATM. Those around the machines will be able to collect any interactions with the endpoints and in the surrounding area. For the most part, the sensors will pick up harmless interactions, but other times this may be an indicator that a threat actor was trying to take money out of the machine. As such, collecting, sorting, and analysing real-time data from the sensors can protect the bank and their customers and mitigate any harmful threats.

Furthermore, predictive analytics and continuous monitoring will enable banks to forecast the future performance of each touchpoint. Banks are able to apply specific parameters. Depending on their current business objectives they can better understand how each service channel is forecasted to perform in a specific situation.

How advanced analytics is transforming banking

As budgets tighten with rising costs, banks need to approach their ATM networks in a smarter way to optimise cash management and data forecasting. Real-time data tracking gives banks a greater understanding into customer behaviour. This is key to service performance improvements, including knowing in real time whether the ATM self-service interface is working or not. However, banks must get their data right, before they lean on the insights.

From real-time monitoring of customer interactions, financial services institutions can collect data based on the transaction flow, which can indicate if there is a better way for customers to complete their transaction. This will allow banks to see where network inefficiencies lie and then drive a culture of continuous improvement. The ATM is a vital touchpoint for a full omnichannel service, so banks leveraging data in the right way will ensure that the endpoint and the network are more user friendly.

Moreover, real-time tracking will also enable banks to predict when cash cartridges need to be replenished. As such, this will ensure there is enough cash in the machines for customers, and be able to better forecast how much cash the endpoint will need. This creates efficiencies around how banks deliver cash to the machines that need it. It reduces their Cash-In-Transit (CIT), security, interest and insurance costs.

Digital Transformation

To make sure that banks are making the most out of the data, they should leverage a dynamic, industry-specific banking business analytics platform. This should be available to all in the business and be able to seamlessly integrate into their current systems. The platform must collect and analyse the data in real-time from all key touchpoints in a bank’s network. Importantly, this data should be converted into usable insights for customer behaviour and performance metrics for the ATM. This will enable banks to adapt their offerings to changes in customer needs and market conditions. This will place banks on the front foot so they can focus investment in the up-and-coming areas.

The banking industry shows no signs of slowing down when it comes to digital transformation and development. The key here is to understand how all service channels, in-person and online, are performing to ensure customer demands are met. The way to do this is through leveraging real-time insights and data analytics. Financial services organisations must transform their approach to self-service banking strategies as data analytics is not only a driver of competitiveness, but also of long-term success.

Learn more at https://www.aurigaspa.com/en/