The post Modular Financial Infrastructure: The End of Monolithic Solutions and Vendor Lock-In appeared on BitcoinEthereumNews.com.
By Ilya Podoynitsyn, CEO of FinHarbor The Hidden Cost of Getting Started Fast Launching a neobank has never looked easier on paper. Dozens of vendors promise turnkey solutions: sign a contract, plug in a few APIs, go live. Yet behind these quick starts lies a pattern that has drained the fintech industry of billions in unrealized potential. Companies that chose speed over architectural sovereignty are discovering that the most expensive part of their platform was never the license fee – it was everything that came after. For years, the default was a bundled banking stack from a single provider. One vendor, one contract, one integration layer. But as embedded finance, cross-border expansion, and regulatory complexity accelerate in 2026, this approach has become a strategic liability. Where Monolithic Architectures Break Down The core promise of a monolithic platform is simplicity. In practice, that simplicity holds only until the business needs to evolve. Six months after launch, a company needs a local KYC provider for a new market or a crypto custody module. In a tightly coupled system, this requires the vendor’s involvement – a queue, their release cycle, their price. Or no feature at all. The numbers are stark. Industry estimates suggest banks allocate 70–75% of IT budgets to maintaining legacy systems, while McKinsey notes that global banking tech spending has been growing at 9% annually – outpacing revenue growth of 4% – yet productivity gains remain elusive. A 10x Banking survey found that 55% of banks consider existing core solutions their biggest roadblock to business goals. The regulatory dimension compounds the problem. Updating a single compliance module in a monolith triggers full regression testing. I have seen cases where a KYC provider switch froze all releases for two to three months – because every component was entangled with every other.…