- May 19, 2026
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How AI and composability are accelerating core banking modernization
To stay competitive, banks are shifting from slow, multi-year modernization projects to agile, AI-driven transformations. By moving workloads away from monolithic mainframes and adopting composable architectures, financial institutions can finally deliver the seamless, personalized experiences customers now expect.
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Nora NowackSenior Product Marketing Manager, Magnolia
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Take a tour nowOur key takeaways from Gartner® Report:
Shrinking timelines: Core modernization expectations have shifted from five-year plans to one-to two-year delivery cycles.
The AI productivity promise: Agentic AI is expected to improve deployment times by 3x by 2028.
Pragmatic migration: Leading banks are reducing risk by abstracting business logic away from the core rather than attempting a "big bang" mainframe exit.
Adaptive UX: By 2029, half of digital banking platforms will use AI to create personalized, adaptive user interfaces.
The shift toward a pragmatic, "un-monolith" core
For decades, banks relied on monolithic mainframes that, while stable, created significant technical debt and blocked innovation. Today, the goal isn't necessarily a total, immediate exit from these systems—which often leads to business disruption and financial loss—but rather a pragmatic migration.
By using cloud-native platforms cloud-native platforms and composable architectures, we help you abstract business logic away from the legacy core. This "un-monolith" approach allows you to:
Reduce operational risk: Keep stable core functions on the mainframe while moving innovative workloads to the cloud.
Improve interoperability: Ensure your core system can communicate with modern marketing tools and partner APIs.
Modernize incrementally: Break large programs into shorter waves of deliverables for faster value.
Accelerating delivery with agentic AI
The pressure to modernize is no longer just an IT concern; it is a business imperative driven by regulatory changes and the need for speed. CIOs are now leveraging agentic AI—autonomous or semi-autonomous intelligent agents—to bridge the gap between legacy code and modern applications.
AI is being used to:
Extract business rules: Automatically pull logic from old COBOL code to generate modern Java microservices.
Automate testing and documentation: Over 50% of banks already use AI for documenting legacy systems and simplifying code.
Orchestrate workflows: Use specialized agents for transaction validation, compliance checking, and reconciliation.
The definitive guide to AI in a DXP
Learn how AI is revolutionizing content management and digital experiences
Read the guideFuture-proofing the customer experience
The next frontier of banking isn't just a better mobile app; it's an agentic experience (AX). This means moving beyond traditional screens to "systems of intent" that understand, adapt, and respond to user needs in real-time.
To achieve this, banks must embrace composable UX. Instead of a rigid, hard-coded interface, a composable UX layer allows you to assemble or disassemble experiences based on the specific customer persona, task, or relationship stage. This modularity is essential for supporting zero-UI interactions like voice and gestures, as well as proactive AI assistants.
Technical Spotlight: Union Investment’s digital transformation
Union Investment, a leading German financial institution, provides a blueprint for successful core modernization through consolidation and cloud-native architecture.
Read the whole story hereWhy Magnolia DXP for core banking modernization
At Magnolia DXP, we understand that banking modernization is a journey, not a single event. Our platform is built to be the "central station" for your digital experience, bringing together your legacy data and modern cloud services in a single visual interface. By removing the monolithic complexity of traditional suites, we help you deliver personalized banking experiences faster and with a lower total cost of ownership.
How AI and composability are accelerating core banking modernization
Speed up core banking modernization. Learn how AI and composability enable 3x faster deployments and adaptive UX, featuring the Union Investment case study
Get the Gartner reportGartner, Core Banking Modernization Acceleration Trends: AI, Composability and Adaptive UX Shaping CIO Agenda, AliMerji, Vittorio D'Orazio, 4 March 2026.
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Gartner does not endorse any company, vendor, product or service depicted in its publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner publications consist of the opinions of Gartner’s business and technology insights organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this publication, including any warranties of merchantability or fitness for a particular purpose.
