Every vendor claims a different fix for the agentic transition, messaging formats, payments plumbing, data quality, but they all converge on the same diagnosis: UK banks aren’t built for this.
Banks run on legacy systems that predate API-first design by decades. A new wave of vendors has emerged to bridge the gap: SaaScada claims cloud-native core banking infrastructure is needed; AquaGlobal suggests ISO 20022-compliant messaging and reconciliation should be a priority, while leading international strategy consultants KoreFusion argue API infrastructure must be adapted for a real-time payments ecosystem that includes agentic commerce. These are just a few of the organisations world-wide reaching similar conclusions.
As Steve Round, Co-founder and President of SaaScada, puts it
“Trying to build AI on ancient legacy foundations is like racing an Aston Martin over cobblestones. It’s going to be a bumpy ride.”
Do banks have a choice?
Research from AquaGlobal found that 78% of institutions believe failing to modernise puts customer experience at risk.1 SaaScada’s data finds that 79% warn that poor-quality, inexplicable data could worsen financial exclusion, while only 12% feel confident they could actually justify an AI-driven decision to a regulator. 2
The FCA and Bank of England have made clear there’s no middle ground: AI-driven decisions require the same explainability standard as any other regulated decision, with personal liability attached to named senior managers. Banks either run AI properly on rich, governed data, or they don’t run it at all.
Without adequate justification and data, automated infrastructure doesn’t work. Customers with unconventional financial histories, or non-standard income (which is increasingly common), while likely slip through the cracks, and financial exclusion will accelerate.
They’ll be the chassis of the ‘AI-ston Martin’
ERIS SAYS: Licensing means banks aren’t going anywhere. What they can lose is the customer relationship. Neobanks already show both paths: Starling and Monzo hold full licenses and remain the face the customer sees. Others run on Banking-as-a-Service arrangements — Tide, for example, operates on top of ClearBank’s licensed infrastructure. The fintech owns the brand and the relationship; the bank underneath does the regulated work, present in the license, invisible in the product.
The interface, not the license, is where the value sits. Whoever owns the app owns the customer relationship. They get the credit for the product feeling good. The licensed bank underneath collects a thinner utility margin for carrying the regulatory risk, while trust attaches to whoever is on screen.
Banks that want to stay in the driver’s seat have a narrow window and increasingly that means collaborating with infrastructure vendors they might once have seen as competitors. Banks that don’t act now will likely disappear from view, becoming the chassis of someone else’s agentic, API-first machine.