Sector Spotlight: Core Banking Systems — Fourth Generation

Sector Spotlight: Core Banking Systems — Fourth Generation

JUNE 24, 2025

This is the first installment in a four-part series that covers the four generations of core banking systems. For more information on how these generations are defined and their history, read our commentary here.

The latest generation of core banking systems — the fourth generation — focuses on process-centric, composable platforms with modular, cloud-native architectures. These systems represent the latest technology available. They use lightweight code and are continuously deployable, offering low maintenance costs and scalability.

What’s going on in core banking systems — fourth generation

Fourth generation core banking systems came to market beginning around 2018. They are part of a wave of next-generation cores but represent the most novel crop. As noted in our report, Core Modernization 2024: The Next-Generation Opportunity, there are three baseline characteristics for a next-generation system:

It operates in real time, with no end-of-day reconciliation.
It is built for the cloud, allowing for frequent releases.
It communicates via modern, RESTful application programming interfaces (APIs).

However, fourth generation cores push beyond these characteristics to include more advanced features like a microservices architecture, extensibility, multi-position, multi-asset, and multi-tenant capabilities, and an event-driven foundation.

Fourth generation core technology tends to be natively built and often acts only as the system of record, providing a “choose your own adventure” value proposition suitable for only the most progressive institutions. Adoption of fourth generation systems is still low, based on our research, likely due to the high investment and expertise required to implement these systems, and the fact that the technology is new and unproven.

Fourth generation core banking systems vendor snapshot

The fourth generation core banking system space includes a mix of established vendors, new entrants, and international players. A bank’s choice of system will depend on its business and functional requirements, and many may not be ready for (or even strategically in need of) such a solution at this time.

Here’s a snapshot of fourth generation core banking systems. The list is representative:

Finxact (Fiserv): Finxact, developed by Frank Sanchez who also built the Profile core system, is a cloud-native, event-driven platform that communicates via RESTful APIs and is designed for real-time processing. It is agnostic to asset classes, currencies, and time zones. Finxact was acquired by Fiserv in 2022.

FIS Modern Banking Platform (MBP): FIS launched MBP in 2020. It is API enabled, real time, cloud native, and provides advanced analytics. MBP offers a microservices architecture that houses independent modules for individual products. The company says, it is “multi-everything,” which includes multi-platform, multi-tenancy, multi-currency, multi-language, and multi-time zone.
OBS CloudCore (Open Banking Solutions): OBS CloudCore is a cloud-native core banking system that uses Oracle Apex as its database. It is API first and operates in real time. The CloudCore platform is already operational across 15 countries in the southern hemisphere, with 55 bank and credit union clients, and it’s now making its way into the US targeting community-based financial institutions (FIs).
Vault Core (Thought Machine): UK-based Thought Machine was founded in 2014, but its Vault Core deployed with its first client, Lloyds Banking Group, in 2018. The company entered the US in 2021, announcing JPMorgan Chase as a new customer. Its platform offers a real-time ledger, standardized APIs, and can be deployed in public, private, and hybrid environments.

10x Banking Platform: UK-based 10x Banking’s core platform has been live for several years, but in 2024, it announced the launch of its “meta core,” which is designed to further accelerate speed to market. It offers multi-cloud and hybrid support, standardized APIs, real-time processing, and, according to the company, the ability “to create and maintain as little as 2,000 lines of code for a single customized banking product.”

What to look for in fourth generation core banking systems

A fourth generation core banking system should be real time, built for the cloud, API native, and include a range of features that support ongoing flexibility and development. These systems represent the bleeding edge of the market.

Real time: Operates in real time, with no end-of-day reconciliation. System is available 24/7/365, with no batch windows.
Built for the cloud: Built for the cloud, allowing for frequent releases through continuous integration and continuous delivery (CI/CD).
API native: Communicates via modern, RESTful APIs. Built to do so, not retrofitted.
Microservices architecture: API architecture design that allows you to pick and choose components. System is built around many small, decoupled services that do specific things.
Extensibility: Easily adapted, enhanced, and integrated with new functionalities, without requiring fundamental changes.
Multi-position and multi-asset: Ability to create multiple positions within one account, for example, pockets or pools of savings. Supports any currency.
Multi-tenant: Serves multiple clients in isolation through single instance.
Event-driven: Platform is driven by events that kick off other events and are timestamped for traceability.

Sector Spotlight: Core Banking Systems — Fourth Generation

Sector Spotlight: Core Banking Systems — Fourth Generation

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