“Previously on... nothing. This is where it all begins.”

Welcome to NEXT — Fixtra’s new blog-serial. A journey from first principles to truly transformative innovation. We’re glad to have you onboard.

The Pressure Is Real

Imagine you're the CIO of a mid-sized bank. Every board meeting opens with the same tension: revenue pressure, declining NIM, vanishing loyalty. Someone asks the question — again — “How are we responding to fintech?”

You open your mouth… and pause. Because you know the truth: the tectonic plates under traditional banking have already shifted. And the old playbook won’t cut it.

This is not a hypothetical. This is 2025.

The Fall of the Full-Stack Fortress

For decades, banks thrived on their full-stack control: deposits, payments, credit, wealth — all vertically integrated. But over the past five years, that tower has cracked. Welcome to the great unbundling of banking.

In 2024 alone, over 15–20% of retail banking revenue was considered “in motion”, according to SAP Fioneer and BCG estimates^[1]. Fintechs didn’t just nibble at the edges — they redefined the center.

• Lending? Split into BNPL, microcredit, instant salary access.
• Payments? Fragmented by wallet apps, stablecoins, and cross-border APIs.
• Personal finance? Absorbed into behavioral nudges, round-ups, and embedded insurance.

Meanwhile, traditional banks were stuck maintaining legacy infrastructure with a compliance-first culture and decade-old IT projects that never quite finished.

Platforms Beat Products

The world moved from products to platforms. Embedded finance made banking invisible — and that’s what made it powerful.

Consider this: In 2025, over 52% of financial services are initiated outside of a bank’s own digital channel — whether it’s a ride-sharing app offering insurance, an e-commerce checkout offering BNPL, or a chat-based wealth advisor.

As HSBC’s Fintech 2025 report describes, the battleground is now experience, not ownership^[2]. Users don’t care who provides the savings account. They care whether it understands them.

The Core Is Not the Differentiator Anymore

In this new world, your core banking system is not your competitive advantage. In fact, if it can’t evolve in months (not years), it becomes your greatest liability.

That’s because:

• You can’t launch new products at fintech speed.
• You can’t integrate third-party services without fragile spaghetti-code middleware.
• You can’t innovate without destabilizing the very core you’re trying to protect.

The result? Innovation freezes. Risk grows. Margins shrink. And a generation of customers grows up without ever walking into a bank branch.

The Fintech Mindset Shift

To survive, banks must think and build like fintechs. That means:

• Composability over monoliths
• API-first, event-driven, and modular core systems
• Continuous delivery, experimentation, and AI-native processes
• Culture of digital product thinking, not compliance gatekeeping

In short, it’s not just about digital transformation. It’s about digital identity.

What’s Holding Banks Back?

Three systemic blockers stand in the way:

1. Legacy Infrastructure

Most banks still run on fragmented systems — sometimes with over 400 apps stitched together. According to SAP, over 60% of Tier 1 banks still rely on mainframe-era infrastructure for at least one critical core function^[3].

2. Siloed Data

Finance, risk, treasury, compliance — each operates with its own data model. This leads to inconsistent reporting, delayed insight, and a lack of real-time steering.

3. Organizational Inertia

The culture of “don’t break the bank” creates decision paralysis. Even with the right tech, few banks have the change muscle to rethink their operating model.

The Strategic Response: Build the Fintech Inside the Bank

So, what’s the path forward?

Leading banks are taking a dual-speed approach:

• Keep the core stable, clean, and compliant (think SAP S/4HANA or Fioneer TRBK).
• Build innovation side-by-side with SAP BTP, using APIs, events, and low-code automation.

This allows you to experiment at the edge, without destabilizing the core — and scale what works.

SAP calls this the “keep the core clean” principle, and it’s already being adopted across markets from EMEA to APAC^[3].

The New Stack: Clean Core + Composable Innovation

This stack allows banks to:

• Launch new products in weeks, not years
• Automate complex workflows with Joule Agents
• Deliver real-time customer experiences via behavioral banking
• Integrate with payment rails like SEPA Instant, NPA, VISA Connect
  
  

Voices from the Frontlines

“Composable banking is not an architecture choice. It’s an operating model.”
– Accenture, 2025 Trends Report

“We no longer think of ‘digital banking’ as a channel. It’s how banking exists.”
– Global Head of Innovation, Tier 1 EU Bank

“What we used to call core modernization… is now just survival.”
– SAP Fioneer Banking Strategy Memo, 2025

Thought Leadership = Real Leadership

Fintechs taught banks how to move faster. But the next generation of leaders won’t just move faster — they’ll move smarter.

That means:

• Learning to trust AI not just for automation, but decision-making
• Monetizing internal data streams without compromising privacy
• Using embedded finance as a way to grow beyond your own channel

Closing Reflection

This isn’t about banks becoming fintechs. It’s about adopting the mindset, tooling, and velocity that defines the future of financial services.

The unbundling has already happened. Now, the race is on to re-bundle banking — intelligently, modularly, and in real-time.

What Next

In Episode 2, we’ll go deeper: What does it take to design a composable core? And how do SAP TRBK and SAP BTP bring it to life — without breaking what already works?

Fixtra – Trusted Guide

At Fixtra, we help banks navigate this exact transformation — with composable architectures, SAP BTP extensions, and AI-driven platforms that don’t just follow the fintech wave, but help shape it. The next chapter of banking doesn’t belong to the fastest movers — it belongs to the smartest builders.