Author – Rudy Kawmi, Managing Director - MEA & APAC, Universal Banking at Finastra

“Change is the only constant in life,” said Greek philosopher Heraclitus. This wisdom rings true for Asia Pacific’s banking sector which is marked by rapid technological adoption, intense competition from fintech challengers, and evolving customer expectations for speed, convenience, and personalization.

Legacy systems often limit banks' ambitions. Ideally, banks could upgrade their old systems to match new players' tech advantages while leveraging their brand and expertise. However, these projects can be disruptive, and new tech often does not fully replace the old, like how bank branches coexist with digital channels. This makes modernization even more challenging.

There is a better way than total replacement, it’s called Symbiosis. This is where next-generation solutions are deployed alongside existing systems, and Symbiosis offers a compelling alternative to rip-and-replace approaches. Not only do banks get access to new capabilities fast, without disrupting the areas that are not affected, but they can gradually replace everything – if they so choose.

Symbiosis: Enabling Agility and Innovation

IT spending in Asia Pacific retail banks is set to grow by 5.8% in 2025, with further increases expected in 2026. The continued rise of fintechs is driving traditional banks to be more responsive and agile. Cloud adoption and the rollout of ecosystems are accelerating, providing flexible, scalable infrastructure for innovation. According to Finastra’s recent Financial Services State of the Nation survey, over a quarter (27%) of financial institutions globally have improved or deployed cloud solutions in the past year. In APAC, countries such as Vietnam (56%), Hong Kong (46%), and Singapore (44%) are leading the way in modernizing their operations. This evolving competitive environment in APAC leads banks to face the challenge of modernizing core systems without disrupting ongoing operations or incurring prohibitive costs. Symbiosis offers a phased approach to:

• Enhance Agility: Deploy next-gen systems for specific business lines to quickly launch new products and services
• Improve Customer Experience: Provide seamless, integrated digital journeys that meet rising expectations for speed and convenience
• Future-Proof Infrastructure: Build flexible, scalable platforms that accommodate emerging technologies like AI and open banking
• Manage Costs and Risks: Avoid the complexity and risk of full core replacements while optimizing IT budgets and resources

Integration complexity, operational continuity, and regulatory compliance are critical considerations, especially given the region’s diverse regulatory regimes and rapid technological evolution.

Strategic Implications for Asia Pacific Banks

Symbiosis empowers Asia Pacific banks to leverage their strong market positions and customer bases while adopting the agility and innovation capabilities of fintechs. This hybrid model supports rapid experimentation, faster time-to-market, and continuous improvement in customer engagement.

By improving data integration and analytics through Symbiosis, banks can unlock personalized offerings and risk insights, enhancing competitiveness in a crowded market. The approach also aligns with the region’s emphasis on cloud adoption and AI, positioning banks to capitalize on emerging technology trends.

The Role of Generative AI (Gen AI)

A Celent report reveals that 65% of banks plan to launch AI-driven customer services in 2025, with 29% making it their top tech investment. AI and advanced data analytics are set to enhance many areas of front and middle office operations. For example, Tonik Bank in the Philippines expects fivefold efficiency gains by integrating AI into quality control, underwriting, and voice analysis. Next-gen core banking platforms will be essential for these advances, with Symbiosis offering a practical way to blend new and legacy technologies.

Cloud Adoption and Open Banking

Cloud adoption is another critical trend in the Asia Pacific banking sector. By moving to the cloud, banks can achieve greater scalability, flexibility, and cost-efficiency. Cloud platforms enable banks to quickly deploy new services, scale operations as needed, and reduce the costs associated with maintaining on-premises infrastructure. Additionally, open banking initiatives are gaining traction, allowing banks to collaborate with fintechs and other third-party providers to offer innovative services.

Regulatory Compliance

Navigating Asia Pacific's regulatory landscape is challenging for banks, especially with cloud adoption concerns like data sovereignty. A cloud-first, not cloud-only strategy helps banks stay ready for regulatory shifts. Symbiosis aids compliance by integrating management systems into digital platforms, ensuring adherence to regulations while maintaining efficiency. This approach keeps banks agile and responsive to regulatory changes, ensuring continuous compliance.

Change Management

Effective change management is crucial for the successful implementation of Symbiosis. Banks must engage stakeholders at all levels to ensure alignment and support for new operating models. This includes comprehensive training programs to equip staff with the skills needed to navigate new systems and processes. By fostering a culture of continuous learning and adaptation, banks can ensure smooth transitions and minimize disruptions.

Future Perspectives & Conclusion

The future of banking in Asia Pacific is digital-first, with Symbiosis set to play a central role in this transformation. This hybrid approach not only enhances operational efficiency but also drives innovation and growth by enabling banks to integrate advanced technologies with legacy systems to create a resilient and agile banking ecosystem. With Symbiosis, banks can reap the benefits of next-gen core banking systems faster while reducing the risks associated with complete system replacement. Finastra’s core banking experts are pioneering this compelling alternative that prioritizes human-centric innovation. Read our whitepaper to know more.