Legacy Banking Systems Are Slowing AI Adoption, Visa's Pismo Says
Financial institutions face a widening gap between what customers expect and what aging infrastructure can deliver. As artificial intelligence reshapes banking operations, the core systems that have reliably processed transactions for decades are becoming a competitive liability.
Leonardo Collado, senior vice president and general manager of Pismo, a Visa solution, said legacy systems have served the industry well but were never designed for real-time payments, AI-driven decisions, or the personalization customers now demand.
"Legacy infrastructure cannot support those AI-driven cases," Collado said. "You can't just place new tech on old stack."
The Economics of Technical Debt
Roughly 70% of IT budgets go toward maintaining outdated systems, leaving institutions with minimal resources to build new products or customer-facing features. That constraint has transformed infrastructure modernization from a technical problem into a boardroom issue.
"Modernizing infrastructure has gone from a technical discussion that only the technical people had to a C-level discussion," Collado said.
Both large banks and FinTechs face identical pressures. Customers expect speed, simplicity, and intelligence-not just stability. Systems designed for batch processing and slower settlement cycles cannot meet those demands.
Why Stability No Longer Guarantees Loyalty
Many banking systems accumulated layers of patches, integrations, and workarounds over decades. They remain reliable but carry mounting operational complexity.
"Stability is an asset, but complexity is the tax," Collado said.
AI intensifies these pressures by raising expectations around contextual personalization-where experiences adjust continuously to customer behavior in real time. That requires infrastructure capable of handling adaptive analytics, rapid decisions, and multiple settlement frameworks, including blockchain and stablecoin environments.
A Phased Approach to Modernization
Large-scale system replacements introduce operational risk that most institutions cannot tolerate. Pismo has instead positioned itself around incremental modernization, where banks upgrade services one at a time while maintaining continuity.
Thailand-based FinTech T2P migrated roughly 320,000 customer accounts to a cloud-native platform in three months. Denmark's Lunar Bank used Pismo infrastructure to support more than one million users across Nordic markets.
Collado emphasized that modernization strategy should begin with customer value, not technology. "I don't think you start with infrastructure," he said. "I think you start with your customer, your consumer, what value they're trying to drive."
That distinction may determine which institutions adapt most effectively as payments systems move further into real-time commerce and increasingly complex digital ecosystems. AI for Finance and AI for IT & Development have become central to that strategic calculus.
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