Why 99% of EMEA Banks Need to Modernise Payment Systems

Right now, the banking sector across Europe, the Middle East and Africa finds itself in a transitionary moment.

While fintech start-ups and neobanks have been grabbing headlines with their sleek apps and instant payments, traditional banks have been quietly working behind the scenes on their own transformation.

The numbers tell the story. According to new research from Volante Technologies, a staggering 99% banks in the EMEA region are planning to implement new payment solutions within the next year. 

That's not just a trend, that's an industry-wide sprint towards modernity.

Volante finds that banks are putting serious money where their mouth is, with institutions committing an average of nearly US$1.5m to modernisation projects in the coming 12 months. 

That may not sound a lot in the world of banking, but this figure takes into account even the smallest financial institutions across the region.

More than 50% of banks are so eager to get started that they are aiming to complete their upgrades within just six months.

The old guard fights back

For years, traditional banks have been stuck with legacy systems that were state-of-the-art in the 1990s, but now feel like old relics. 

More than a quarter of banks are still relying on technology that's either built into their core banking platforms or cobbled together from a mix of internal and vendor solutions that are at least five to 10 years old.

"The fifth edition of The Big Survey shows banks recognise that modernising payments is crucial to survival in the evolving payments landscape," says Vijay Oddiraju, Co-Founder and Chief Executive Officer of Volante Technologies.

It's not hard to see why. While traditional banks have been wrestling with creaky and cumbersome infrastructure, plucky fintech upstarts have been building payment systems from scratch, designed for the smartphone era. 

The result? Customer expectations have fundamentally shifted, with many now demanding instant payments as standard.

What's driving the rush?

The motivations behind this push for modernisation are quite clear. 

Nearly a third of banks cite cost efficiency and operational resilience as the main reasons behind the upgrades. Put simply, banks want systems that work better and cost less to run.

But there's more to it than just savings — it’s also about the competitive edge. 

The pressure from fintech companies and neobanks is real, and it's forcing established players to seriously up their game. 

When customers can transfer money instantly through a smartphone app or pay with one click, traditional banks can't afford to offer services that take days to process.

Volante’s research lifts the lid what is keeping banking executives awake at night:

• Vendor selection anxiety: 38% of banks say choosing the right technology partners is their biggest concern — even more than cybersecurity risks or budget constraints
• Legacy system burden: More than a quarter are still stuck with outdated technology that's holding them back
• Skills gap worries: Around a third are concerned about having the internal expertise to manage such complex transitions

The cloud question

When it comes to cloud adoption, banks are taking a measured approach.

Fifty-eight per cent of banks are using a hybrid strategy that combines cloud-based and on-premises solutions, while a quarter are still exploring their options while remaining primarily on-premises.

This cautious approach makes sense in a heavily regulated industry where security and compliance are easily compromised, but it also speaks to the difficulty of modernising huge systems and networks, especially when compared to more agile fintech start-ups.

Why 2025 is such a crucial year for banks

In the industry, this year is being regarded as a pivotal one.

With regulatory deadlines quickly incoming and with legislation like SEPA Instant Payments and SWIFT ISO 20022 on the horizon, banks are having to get a move on with modernisation.

"It's not only market competition and changing customer expectations that are impressing this urgency upon them: 2025 is a pivotal year for regulatory deadlines," Vijay explains.

This regulatory pressure is adding extra urgency to what was already a critical business imperative.

Banks that don't modernise risk falling foul of compliance requirements while simultaneously losing ground to more nimble competitors.

The fact that banks are prepared to invest an average of US$1.5m in payment modernisation shows just how critical they view this transformation. But the size of these budgets also explains why institutions are being so careful about their choice of technology partners.

"For banks, the right partners are ones who will help them modernise their payments while lowering risk, improving ROI, and helping them onboard new clients quickly," Oddiraju notes.

The winners in this modernisation race will be the banks that can successfully navigate the transition while maintaining service quality and regulatory compliance.

Those that fall behind risk being left with outdated systems that can't compete in an increasingly digital-first world.