Over the past decade, digital transformation in financial services has delivered visible and tangible results. Modern client portals, mobile applications, faster onboarding, and smoother digital interactions have become standard expectations across the investment industry.
Yet behind these polished frontends lies a less visible but increasingly pressing challenge: how sustainable are these experiences when the core infrastructure beneath them remains unchanged?
In a recent episode of Dorsum Expert Talks, Bálint Fischer, Business Development Director, and Péter Sallai, Chief Technology Officer at Dorsum, explored why the next phase of digital transformation must focus on the backend—and why for many institutions, the time to act is now.
70% Spent on Maintenance, 30% Left for the Future
According to recent industry research, investment service providers still spend up to 70% of their IT budgets on maintaining existing systems. That leaves only a small fraction for innovation, new products, and responsiveness to market and regulatory change.
“That figure is a very strong indicator of where the industry stands today,” said Bálint Fischer.
“It’s not that institutions lack ambition or ideas. The reality is that keeping legacy systems alive consumes enormous resources—resources that could otherwise be invested in innovation.”
This imbalance creates a structural slowdown. Even when business demand exists, technology constraints often dictate what is realistically possible—and how fast.
From Frontend First to Backend Reality
The industry’s transformation journey did not take a wrong turn. Prioritizing frontend development was a rational response to customer expectations and the rapid acceleration of digital channels, especially during the past decade.
However, that phase has reached its natural limits.
“For a long time, the real bottleneck wasn’t on the frontend,” explained Péter Sallai.
“But over the last five years, expectations around automation, integration, real‑time processing, and IT security have increased dramatically. Systems designed 30 or 40 years ago simply cannot keep up.”
As a result, introducing new products, modifying pricing, or responding quickly to regulatory changes has become increasingly complex and costly—despite modern client-facing interfaces.
When the Competition Is No Longer Another Bank
One of the most striking shifts highlighted in the conversation was how investment firms increasingly redefine competition.
“In more and more discussions, we hear the same sentence: ‘Our competitors aren’t other banks—our competitor is Revolut,’” said Péter Sallai.
“That single statement completely changes how decision‑makers think about speed, relevance, and time‑to‑market.”
In this context, stability alone is no longer enough. Institutions must be able to launch, adapt, and evolve services rapidly—or risk falling behind digital‑native players who were built for agility from day one.
Core System Changes Only Happen When It Truly Hurts
Modernizing core systems is rarely a welcomed initiative. These projects are complex, high‑risk, and long‑term—often defining an institution’s technology landscape for decades.
“Replacing a core system is not something executives rush into,” said Bálint Fischer.
“Banks tend to move only when the pain becomes unavoidable. And today that pain is coming simultaneously from cost pressure, security requirements, regulation, and business competitiveness.”
In fact, many leaders face this decision only once in their careers. But for institutions still running first‑generation digital systems, postponement is rapidly losing its appeal as a viable strategy.
AI: Incremental Efficiency or Structural Change?
Artificial intelligence has been part of financial services for years, but its role is now evolving far beyond incremental automation.
“We’ve moved past small efficiency gains,” noted Péter Sallai.
“With the emergence of agentic AI, entire operating models are starting to change. Roles disappear, new ones emerge, and skill requirements shift fundamentally.”
This transformation is not only technological—it is organizational. The real challenge lies in integrating AI into daily operations in a way that is scalable, controlled, and aligned with long‑term business strategy.
Digital Transformation 2.0
The discussion ultimately points to a clear conclusion: digital transformation in investment services has entered its second phase. The visible wins on the frontend must now be matched by structural renewal beneath the surface.
“This isn’t about three‑year ROI calculations,” emphasized Bálint Fischer.
“A core system decision affects how an organization operates for the next 20 or 30 years. That also makes it a rare opportunity—not just to upgrade technology, but to rethink business processes entirely.”
The full episode of Dorsum Expert Talk dives deeper into backend modernization, composable architectures, regulation, and the practical implications of AI for investment operations.
For leaders shaping the future of financial infrastructure, the message is clear: the next decade will be defined not by how digital your frontend looks—but by how adaptable your foundations truly are.
