Legacy Bank Payment Systems Face Growing Threat From Fintech Rivals

The rapid adoption of real-time payments, embedded finance and digital asset platforms is leaving banks reliant on monolithic legacy systems trailing in product launches, data integration and settlement speeds. Form3 and Capgemini advocate a shift to modular APIs and AI-driven automation. Cross River points to its internally developed API core as an example, highlighting the risk that banks could cede control of payment access points to fintech firms and lose deposits and customer relationships.

American Banker examined the issue in reports published on April 7 and June 19, 2026. Juniper Research forecasts that the global embedded payments market will grow 134% from the end of 2024 through 2028, while a 2025 KPMG survey found that just over half of banks had made embedded finance a priority. KeyBank executive Eric Girard warned that bank brands risk being pushed into the background. The reports did not disclose the cost of modernizing the systems.