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Are you in the thick of your 2025/2026 budgeting yet? Although it’s often seen as a necessary evil—and you’d rather be making your holiday travel plans—a bank’s budget is an essential part of the success and growth of your institution.
As you allocate resources and plan for the year ahead, consider the importance of your bank’s IT infrastructure. It is a critical component that helps keep your operations running smoothly and efficiently. With technology constantly evolving, it’s necessary to regularly review and upgrade your infrastructure to stay competitive in the market and provide excellent service to your customers.
Is Your Bank Struggling With Gaps in Its IT Infrastructure?
Banks are one industry that have had to pivot quickly with the rise of online and mobile banking. And while maybe you’ve adapted to this digital shift, there may still be gaps in your banking IT that can affect efficiency and customer experience.
1. Obsolete Systems
When was the last time your bank had a major hardware update? Many institutions still rely on legacy banking systems that were cutting-edge years ago but have since become a significant hindrance to efficiency.
According to a report by CIO Dive, “More than three-quarters of IT decision-makers said their teams spend 5 to 25 hours a week updating and patching legacy systems.” This situation not only drains financial resources but also restricts the ability to adapt to the rapidly changing technology landscape.
2. Security Vulnerabilities
Security vulnerabilities pose another major challenge. The financial industry remains a prime target for cybercriminals due to the valuable customer data and financial assets it holds. In a 2024 survey conducted by PwC, the proportion of US businesses that experienced a cyber attack costing $1 million or more increased from 27% to 36%.
The use of outdated security measures—even the simple act of refusing to implement multi-factor authentication—and patchy IT support make it difficult to defend against sophisticated threats. Such vulnerabilities can lead to cyber attacks, financial losses, and reputational damage.
3. Customer Expectations
Customer expectations have evolved significantly in recent years. Today’s bank customers demand seamless digital experiences, whether it’s online banking, mobile apps, or instant customer support. According to the American Bankers Association, 77% of American adults prefer to bank digitally, via an app or website.
4. Constant Compliance Changes
Regulatory compliance remains a pressing issue for banks. Financial regulations are constantly evolving, necessitating ongoing updates to banking IT to ensure adherence. For example, the FFIEC Cybersecurity Assessment Tool will be phased out on August 31st, 2025, requiring financial institutions to use and become familiar with several frameworks.
Failing to comply with these regulations can result in hefty fines and legal consequences.
5. Dependency on Third-Party Vendors
As the banking industry becomes increasingly dependent on technology, banks are also relying heavily on third-party vendors for various services. This includes core banking systems, data management platforms, and cybersecurity solutions.
While outsourcing can provide cost savings and access to specialized expertise, it also introduces a new set of risks. The US Office of Financial Research noted that smaller institutions are more at risk because of their “greater reliance on third-party service providers,” like in the case of the 60 credit unions that exposed the PII of almost 100,000 customers because of a compromised vendor in November 2023.
A major concern is the potential for third-party vendors to experience disruptions or data loss, which can have a direct impact on the bank’s operations and customer trust. Thus, banks must carefully select and monitor their vendors to ensure they have proper risk management protocols, like a SOC 2 audit, in place.
What Makes up Your Bank’s IT Infrastructure?
To understand how IT support and upgrades can enhance efficiency, let’s break down what constitutes banking IT infrastructure:
- Hardware: This includes servers, storage, networking equipment, and end-user devices like computers and mobile devices.
- Software: Core banking applications, customer relationship management (CRM) software, and other specialized software that supports various banking functions.
- Facilities: Data centers, branch locations, and any physical spaces that house IT equipment.
- Service Components: IT services such as helpdesk IT support, network maintenance, and system updates.
- IT-Enabled Processes: Business processes that rely on IT infrastructure, such as online banking and transaction processing.
What Makes Banking IT Infrastructure Effective?
Reliability: In banking, IT support and infrastructure need to be rock-solid to keep services running smoothly for customers. Even a brief system outage can lead to significant losses for both the bank and its clients.
Security: Protecting sensitive financial data is non-negotiable. Robust security measures are essential to guard against cyber threats and fraud, ensuring customer trust and regulatory compliance.
Efficiency: Modern banking demands efficiency. Streamlined processes, optimized resources, and faster transaction speeds not only meet customer expectations but also help reduce operational costs.
Dependability: Dependable systems are the backbone of customer trust. Banking IT infrastructure must deliver accurate, timely results consistently, without unexpected hiccups.
Standardization: Standardized IT systems foster seamless integration, collaboration, and compliance across the banking industry. Following established standards ensures systems work together effortlessly, boosting overall operational performance.
9 Banking IT Infrastructure Upgrades You Can Implement for More Efficiency
Let’s now delve into seven key upgrades your bank can make to its IT support and infrastructure, paving the way for improved operational efficiency and enhanced customer experiences.
1. Modernizing Banking Technology for Competitive Advantage
You know better than anyone that updated tools and digital features are constantly on the market. Some of these features can do wonders for your productivity and can result in faster and more accurate services for customers.
These modern systems offer greater scalability, allowing banks to adapt quickly to changes in demand and business growth. For example, during a surge in online banking usage, a modernized banking system can effortlessly handle the increased transaction volume.
Imagine instantly deploying new fraud detection tools or integrating a more user-friendly online loan application system without disrupting your daily operations—modern tech makes this possible.
A managed service provider that specializes in banks will be your best resource for sifting through the constant release of new tools.
2. Cloud-Based Banking Infrastructure
Moving to hosted servers can significantly reduce hardware and maintenance costs, as it eliminates the need for on-premises data centers. This cost reduction is particularly beneficial for smaller community banks. According to a report by Gartner, 95% of digital workloads will be in the cloud by the end of 2025.
Hosted infrastructure also offers exceptional scalability. Banks can easily adjust their computing resources as needed, accommodating fluctuations in demand and business growth. This elasticity is particularly valuable during peak periods, such as the end of the month when many customers perform financial transactions.
If your branch’s servers crash during a high-traffic period, cloud infrastructure ensures operations continue smoothly and customer data stays safe with real-time backups and global accessibility.
3. Banking Cybersecurity Solutions to Protect Sensitive Data
Banks hold a treasure trove of sensitive customer data, making them a prime target for cyberattacks. Enhanced cybersecurity measures not only protect this data but also uphold customer trust and regulatory compliance.
Investing in advanced cybersecurity strategies and tools, such as multi-factor authentication, real-time threat detection, and encryption, can fortify your bank’s defenses. For example, machine learning algorithms can help identify unusual patterns of behavior that may signal a security issue, enabling proactive responses.
And many banks now deploy behavioral analytics to detect when a login doesn’t “feel” like the customer—even if the password is correct—and trigger additional verification to stop fraud.
A data loss incident can cost a bank dearly in terms of legal consequences, loss of reputation, and financial ramifications, making cybersecurity upgrades a wise investment.
4. Mobile Banking App Development and Optimization
Mobile banking solutions are a necessity in the age of smartphones and on-the-go banking. For banks, offering customers the ability to access their accounts, perform transactions, and even receive support via mobile apps has several advantages.
It not only caters to customer expectations but also reduces the load on physical branches and call centers. The cost savings from reduced in-person transactions and call center inquiries can be significant.
Additionally, mobile banking fosters a deeper connection with customers by providing them with a convenient and user-friendly way to manage their finances. The improved customer experience can lead to higher customer retention and acquisition.
5. IT Compliance Solutions for Evolving Banking Regulations
Regulatory compliance is a non-negotiable aspect of the banking industry. Failure to meet these requirements can result in hefty fines and legal consequences. IT upgrades that focus on regulatory compliance are not just about avoiding penalties; they are also about enhancing the bank’s reputation and trustworthiness.
Modernizing banking IT systems to align with regulatory standards ensures that you can adapt quickly to new compliance requirements. This agility is essential in a financial sector that experiences frequent regulatory changes. It also streamlines reporting and auditing processes, making it easier to demonstrate compliance.
6. Cost Reduction and IT Risk Management in Banking
IT support that focuses on cost and risk management can lead to substantial long-term savings. Reducing operational costs by upgrading to more efficient systems or automating processes can free up financial resources for further investments in innovation and growth.
Simultaneously, risk management upgrades can help identify potential issues before they escalate. For instance, enhanced cybersecurity can prevent costly data loss, while data analytics can pinpoint potential financial risks.
By addressing these issues proactively, banks can reduce the financial impact of risk and bolster their stability and resilience.
7. AI and Automation in Banking Operations
Artificial Intelligence (AI) and automation are transforming the banking experience by reducing manual workloads and increasing speed across operations. From intelligent chatbots to automated document processing, these tools reduce human error and accelerate service delivery.
AI-driven chatbots can handle thousands of routine inquiries—like account balance checks or branch hours—freeing up human reps to focus on complex, higher-value interactions.
8. Disaster Recovery and Business Continuity Solutions
Disruptions—from cyberattacks to natural disasters—can cripple banks without strong continuity plans. Implementing reliable disaster recovery and backup systems ensures that data remains accessible and operations can resume quickly with minimal downtime.
If a major power outage or ransomware attack hits your main system, cloud-based backups and preconfigured failover environments can bring your bank back online in minutes instead of days.
9. Partnering with a Banking-Focused Managed Service Provider (MSP)
Working with a managed service provider (MSP) that specializes in banking ensures your IT systems are aligned with the unique demands of the financial industry. These partners bring industry-specific expertise in cybersecurity, compliance, infrastructure, and customer experience, giving your institution a competitive edge while offloading the burden of day-to-day tech management.
Instead of spending internal resources troubleshooting outdated software or monitoring security logs, a banking-focused MSP can proactively manage upgrades, patch vulnerabilities, and provide 24/7 support, allowing your team to focus on growth and customer service.
Steps to Implement IT Infrastructure Upgrades
Implementing banking IT infrastructure upgrades should be a well-planned and systematic process. Here are the key steps:
1. Planning and Assessment
Begin by assessing your current infrastructure, identifying weaknesses, and setting clear goals for your upgrades. Consider the needs of your customers, compliance requirements, and future business plans.
2. Implementation Phases
Break the upgrade process into manageable phases, allowing for a smoother transition. Ensure that the right resources are in place, and communicate changes to all relevant stakeholders.
3. Monitoring and Feedback
Continuous monitoring of the new infrastructure is vital to identify and address any issues promptly. Gather feedback from end-users to make necessary adjustments and improvements.
With the right upgrades, your bank can enhance efficiency, boost security, and meet the ever-growing expectations of your customers, positioning your institution for success.
Not sure where to start? RESULTS Technology can help. Our team of IT experts offers a range of services specifically designed for banks, including core system modernization, cloud migration, cybersecurity solutions, and more. Contact us today to learn how we can transform your IT infrastructure and drive your bank’s success.
Frequently Asked Questions About Banking IT Infrastructure
1. How can banks optimize their IT infrastructure?
Banks can optimize IT infrastructure by moving to scalable, cloud-based environments, consolidating systems, automating manual processes, and implementing real-time monitoring.
2. How do I know it’s time to upgrade my banking infrastructure?
If your systems are slow, frequently crash, or can’t integrate with modern tools like mobile apps, it’s time to upgrade. Regulatory pressure, rising security threats, or customer complaints about digital experiences are also strong indicators that your infrastructure is outdated.
3. What are signs of outdated banking infrastructure?
Key markers include poor system performance, limited scalability, high maintenance costs, lack of mobile integration, security vulnerabilities, and difficulty meeting compliance requirements. Legacy systems often require excessive manual intervention and cannot support modern banking services.
4. How do I choose the right IT vendor for banking infrastructure upgrades?
Look for vendors with deep experience in the banking industry, strong references, and a clear understanding of regulatory compliance (this is best demonstrated by a SOC 2 audit—look for or ask for that information from any IT vendor). Prioritize those offering scalable solutions, proactive support, cybersecurity expertise, and the ability to integrate with your existing tech stack.
5. Why work with a banking-specific IT solutions partner?
Banking-focused IT partners understand the unique regulatory, security, and customer experience requirements of the financial industry. They can offer specialized guidance, faster implementation, and custom solutions that general IT providers often overlook.
6. Can a bank modernize without completely replacing legacy systems?
Yes. Many banks are adopting a hybrid approach where legacy systems remain in place but are enhanced with top-layer solutions like APIs, middleware, and cloud-based services. This strategy allows modernization with reduced risk and lower upfront cost.
7. How do top-layer implementations improve legacy banking systems?
Top-layer implementations use modern interfaces and integrations—like APIs or cloud-based dashboards—that sit on top of your legacy core. This allows banks to deliver new features, automate processes, and improve user experiences without fully replacing their core system.
8. What role does cybersecurity play in infrastructure modernization?
Cybersecurity is foundational. As banks digitize services, they become more vulnerable to cyber threats. A strong infrastructure modernization plan includes encryption, threat detection, multi-factor authentication, and compliance-focused protections to safeguard data and customer trust.
9. How much should banks budget for infrastructure upgrades?
Costs vary based on size, goals, and current systems, but upgrades are often phased to control spend. A good rule of thumb is to assess ROI based on efficiency gains, reduced downtime, regulatory protection, and customer retention—often outweighing the initial cost.
10. How long does it take to modernize banking infrastructure?
Timelines can range from weeks (for layered implementations or cloud migrations) to over a year (for complete overhauls). Working with an experienced MSP can accelerate timelines and reduce disruption by prioritizing high-impact upgrades first.
