A Framework for Modernizing Legacy Core Banking Systems into Cloud-Native Microservices

Abstract

Monolithic designs and rigid frameworks of the legacy core banking systems make the growth of the financial services industry difficult, along with the flexibility and the generation of new technologies. This article presents a comprehensive strategy for the migration of legacy banking systems to their cloud-native microservices architecture counterparts. The architecture design patterns, data migration methods, and models for systematic transition are part of the framework that assists banks and other financial organizations in making their systems resilient, their operations effective, and their ability to innovate at an increased speed. The strangler pattern provides step-by-step replacement options that create the least amount of turmoil while still permitting ongoing validation. Event-driven architectures are targeted at real-time data analytics, required for financial services today. Domain-driven design ensures that the boundaries of the services align with business concepts. Replication mechanisms and incremental migration procedures are two ways in which solutions to data transition address consistency problems. The phased migration models must compromise between goals of innovation and requirements for risk management by carrying out thorough assessments, pilot implementations, core functionality migration, and ongoing optimization. Only those financial institutions that will successfully undergo this change will have technology platforms capable of driving innovation while continuing to meet reliability and compliance standards that form the premise of regulated financial services.