IBS Intelligence Global FinTech Interviews
Go one-on-one with the innovators, disruptors, leaders, and decision-makers driving change in FinTech and financial services. IBS Intelligence delivers exclusive global interviews that uncover strategies, challenges, and the ideas powering the next wave of financial technology.
IBS Intelligence Global FinTech Interviews
EP1024: Transformation is on the way
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This interview features Karthik Sethuraman of audax Financial Technology discussing the urgent necessity for digital transformation within the global banking industry. He argues that traditional financial institutions must modernize to remain competitive, yet warns against the historical failure of massive, high-cost overhaul projects. Instead, he advocates for an incremental approach that allows banks to launch new digital products quickly without immediately dismantling their existing core infrastructure. The text highlights a strategic partnership with 10x Banking, which combines modern cloud-native systems with modular digital layers to streamline this evolution. By adopting these adaptable platforms, banks can effectively manage technical debt while staying responsive to shifting market demands and regulatory requirements. This shift represents a move toward agile business models like Banking-as-a-Service and super apps.
If you are operating anywhere near uh the financial sector right now, you know the ground is completely shifting underneath you.
SPEAKER_01Oh, absolutely.
SPEAKER_00I mean, for the last few years, agile fintechs have just completely commoditized the payment space. They've changed the baseline of how we interact with our own capital.
SPEAKER_01Yeah, the expectations have totally changed.
SPEAKER_00Right. And for the traditional massive, monolithic banking institutions, the grace period is officially over. Standing still is just, well, it's a structural impossibility if they want to survive today.
SPEAKER_01Aaron Powell It is entirely an adapter-parish environment. I mean, the incumbent banks are playing this really desperate game of catch-up right now. Yeah. They're realizing that the very architecture that made them so unassailable for the last 40 years. Right. The moat. Exactly. The moat. That architecture is now the exact thing holding them back. Aaron Powell Okay.
SPEAKER_00So let's untack this because there is a very specific tension here that I really want to explore for this deep dive.
SPEAKER_01Do it.
SPEAKER_00So I was reviewing this fascinating conversation from April 2026. It's from the IBSI FinTech Journal.
SPEAKER_01Oh, right. The Audax interview.
SPEAKER_00Yes. It's a sit-down between their managing editor, Robin Amloot, and Karthik Sithurman.
SPEAKER_01And Karthik is the chief delivery and risk officer at Audax, which is a plug-and-play digital banking platform.
SPEAKER_00Right. And right out of the gate, they dropped this statistic that just paints a really stark picture of the Asia Pacific region. They note that 93% of APAC banking leaders say choosing the right technology platform is critical to their survival.
SPEAKER_0193%. That is massive.
SPEAKER_00It really is. Which, you know, naturally makes you wonder if the other 7% are just quietly updating their resumes.
SPEAKER_01You would hope so. Because if you are in leadership at a legacy financial institution and you don't view digital modernization as your absolute central mandate, you are just misreading the entire economic landscape.
SPEAKER_00Aaron Powell But see, that near unanimous agreement is what fascinates me here because every legacy institution knows they need this overarching buzzy goal of quote unquote transformation.
SPEAKER_01Right, the big buzzword.
SPEAKER_00Yeah. Even the banks that are still running on, you know, carbon copy paper trails and multiple layers of manual physical approvals, they all acknowledge the reality.
SPEAKER_01They know the ship is sinking.
SPEAKER_00Exactly. So if the people holding the purse strings are uniformly in agreement, why is it so incredibly difficult to actually execute? I mean, we're talking about institutions with billions in capital. Oh, yeah. So why does the gap between intent and execution remain so wide?
SPEAKER_01Aaron Powell Well, to understand that paralysis, you really have to look at the enterprise architecture of a traditional bank.
SPEAKER_00Yeah.
SPEAKER_01And more importantly, the really disastrous methodologies they've employed over the last 10 to 15 years to try and fix it. Trevor Burrus, Jr.
SPEAKER_00The old way of doing things. Trevor Burrus, Jr.
SPEAKER_01Right. Historically, the prevailing wisdom for banking transformation was this approach we call rip and replace.
SPEAKER_00Aaron Powell Rip and Replace. Which I mean sounds violent even just saying it out loud.
SPEAKER_01Trevor Burrus, it essentially is violent. For a long time, the industry held this very one-dimensional view that true transformation required pulling out the underlying mainframe entirely. You know, you had to unplug the legacy core, sever thousands of hard-coded integration points, and completely re-plumb the entire institution from the ground up.
SPEAKER_00All in one go.
SPEAKER_01All in one sweeping motion. Yes.
SPEAKER_00I always think of this in terms of like commercial real estate renovation. Okay. Yeah. It's like looking at a 50-story skyscraper that needs better wiring and deciding the only way to achieve it is to dynamite the foundation, rip out every load-bearing wall, and read the elevator shafts.
SPEAKER_01All at once.
SPEAKER_00All while your corporate tenants are still on the top floors trying to execute multimillion dollar trades.
SPEAKER_01That is exactly it.
SPEAKER_00It is inherently chaotic and just practically guaranteed to trigger a cascading structural failure. Trevor Burrus, Jr.
SPEAKER_01And that structural failure is exactly what happens. In the text, Karthik Sithrom uses a very specific phrase. He says, there are scars across the industry.
SPEAKER_00Scars.
SPEAKER_01And those scars are the remnants of these multi-year, multi-million dollar mega projects. Because when a bank attempts a full core replacement, they inevitably uncover just a mountain of unknowns.
SPEAKER_00Aaron Powell Like what kinds of unknowns?
SPEAKER_01Well, say they make a database schema change in the lending module.
SPEAKER_00Okay.
SPEAKER_01Suddenly that breaks the ATM network.
SPEAKER_00Aaron Ross Powell Oh, wow. Because everything is so tangled together.
SPEAKER_01Trevor Burrus Exactly. Unplanned technical dependencies emerge everywhere. And a project that was slated for, say, 18 months, it quietly stretches into four years.
SPEAKER_00Aaron Powell And while you are spending four years untangling that web, you aren't releasing anything new to the market.
SPEAKER_01Aaron Powell That's the thing. That is the ultimate bitter irony of the rip and replace era. By committing to this monolithic overhaul, an institution essentially forces a freeze on its own innovation cycle.
SPEAKER_00Because everyone's busy fixing the plumbing.
SPEAKER_01Right. The entire IT department is consumed by the replumbing effort. They literally can't launch new customer-facing features. They are locked in a purely defensive posture. Jeez. So you spend hundreds of millions of dollars to build a new architecture. And by the time you finally cut the ribbon, the technology you deployed is already three years out of date.
SPEAKER_00So you cross the finish line and realize the race was moved to a different track two years ago. I mean, the disruptive fintechs have already moved on to digital wallets and embedded finance, while the legacy bank is just popping champagne over the fact that their new internal ledger actually balances.
SPEAKER_01They build for a present moment that basically became the past. The technology space simply evolves at way too rapid a pace to support these multi-year blackout periods anymore. Right. I mean, 10 or 15 years ago, there were only a handful of vendors offering core banking solutions. So banks felt they had no choice but to endure these massive vendor-locked overhauls.
SPEAKER_00But today, the landscape is entirely different.
SPEAKER_01Completely different.
SPEAKER_00Which means the strategy has to evolve. If tearing down the entire skyscraper is a guaranteed disaster, these banks had to find a way to leave the foundation intact while still, you know, totally upgrading the experience for the people walking through the front door.
SPEAKER_01Yes.
SPEAKER_00And that is the exact premise behind the alternative that Audacks is pitching in this interview.
SPEAKER_01Right. Audax advocates moving away from that all or nothing approach toward what they call a two-phase strategy.
SPEAKER_00Okay. I I actually need to push back on this concept though. Sure. Because when I look at the mechanics of this two-phase approach, where you basically leave the clunky 1980s COBOL mainframe running down in the basement, but you slap a shiny high-speed iOS app on the front end. My immediate thought is that you are just putting lipstick on a pig.
SPEAKER_01I can see why you'd say that.
SPEAKER_00Right. I mean, how does a sleek user interface actually solve the latency and rigidity of a decaying back end? Aren't you just building a beautiful house on a rotting foundation?
SPEAKER_01It's a fair question, but characterizing it as just a superficial fix really misinterprets how middleware functions in modern architecture.
SPEAKER_00Okay, explain that to me.
SPEAKER_01It's not about ignoring the foundation. It's about strategic sequencing and abstraction. You see, a traditional core banking system isn't just one box sitting in a room. It's connected to multifarious places across the entire organization.
SPEAKER_00Right, like we were saying earlier.
SPEAKER_01Yeah, it's tied to risk, to compliance, to ledgering, to customer data. Trevor Burrus, Jr.
SPEAKER_00A tangled mess of dependencies.
SPEAKER_01Exactly. So what Audacks does in phase one is provide an abstraction layer.
SPEAKER_00An abstraction layer.
SPEAKER_01Right. They sit on top of that legacy core and connect to it through APIs, application programming interfaces, and modular microservices.
SPEAKER_00Okay.
SPEAKER_01They essentially decouple the customer experience from the underlying processing engine.
SPEAKER_00Aaron Powell Oh, I see. So it's almost like trying to run a modern high-speed bullet train over wooden tracks that were laid in the 1800s.
SPEAKER_01Okay, I like this analogy.
SPEAKER_00Aaron Powell Audacks essentially acts as like a magnetic levitation system. It lets the new digital channels hover just above the rotting tracks, interacting with them only when absolutely necessary without being slowed down by all their friction.
SPEAKER_01Aaron Powell That's actually a highly effective way to visualize it. It translates the heavy batch process data of the legacy core into the lightweight, real-time data required by modern web and mobile apps.
SPEAKER_00Right.
SPEAKER_01This allows the financial institution to focus entirely on launching new business models, digital channels, and embedded use cases immediately, without having to wait for a massive core migration.
SPEAKER_00And the operational timeline shifts dramatically here because instead of three years of frozen innovation, the text notes that AudEx enables legacy banks to deliver these new capabilities to the market in just six to nine months.
SPEAKER_01Which is incredibly fast for a bank.
SPEAKER_00Six to nine months is a totally different paradigm. It takes modernization from being this catastrophic bet the company event and turns it into a repeatable, agile process. Yes. You are seeing actual customer adoption and ROI within the same fiscal year.
SPEAKER_01Aaron Powell And that speed inherently mitigates the institutional risk. You aren't throwing capital into a multi-year black box just hoping it works when you finally open it.
SPEAKER_00I just I keep picturing this visual metaphor from the source material.
SPEAKER_01The building.
SPEAKER_00Yeah. Imagine a classical heavy stone bank building, you know, Parthenon-style pillars, the triangular roof, just the ultimate symbol of rigid, immovable legacy.
SPEAKER_01Right, very traditional.
SPEAKER_00But instead of sitting on concrete, the entire stone structure is resting directly on top of a glowing high-speed circuit board.
SPEAKER_01It's a great image.
SPEAKER_00That's what the subtraction layer feels like. You are bridging the stubborn stability of the old institution with the rapid processing of the digital economy, and you're doing it without having to tear down the stone pillars first.
SPEAKER_01Exactly. It allows the institution to stop the immediate bleeding. They can get back into the competitive arena against the agile fintechs right now. Right. But I will say, your earlier critique about the Rotting Foundation is still completely valid.
SPEAKER_00Because you can't hover forever.
SPEAKER_01Exactly. You cannot hover indefinitely. Eventually, those wooden tracks are going to collapse under the sheer volume of modern digital transactions. Phase one ensures immediate survival, sure. But phase two is absolutely required for long-term viability.
SPEAKER_00Right, because no matter how brilliant your API middleware is, if the core mainframe finally fails, the whole system goes dark.
SPEAKER_01It all comes crashing down.
SPEAKER_00So how do they actually achieve both? How do they keep the front end running at top speed while quietly replacing the engine underneath?
SPEAKER_01Well, that brings us to the strategic alliance mentioned in the text. In December 2025, Audacks formalized a partnership with a company called 10X Banking.
SPEAKER_00And here's where it gets really interesting, because 10X Banking operates as a cloud native core banking platform. So we are basically looking at a tag team approach for institutional modernization here.
SPEAKER_01Precisely. It is a highly complementary architecture. 10X provides the modern, flexible core layer underneath.
SPEAKER_00They are the new steel tracks replacing the wood.
SPEAKER_01Exactly. Meanwhile, AudAx provides the top layer, the orchestration, the digital channels, the customer interfaces.
SPEAKER_00I really want to dig into that term cloud native core, though, because it gets thrown around a lot in tech circles. But we aren't just talking about taking the old monolithic software and hosting it on an Amazon or Google server, right?
SPEAKER_01No, not at all. That's a common misconception. Cloud native means the architecture is fundamentally different.
SPEAKER_00Aaron Powell Okay, how so?
SPEAKER_01Aaron Ross Powell Instead of a single massive block of code where everything is deeply intertwined, a cloud native platform like 10X is built entirely on microservices. Right. So the lending engine, the user authentication, the ledger. They're all separate independent services that just communicate with each other.
SPEAKER_00Aaron Ross Powell Oh, I get it. So if one component needs an update, you update just that component.
SPEAKER_01Aaron Powell Exactly. Without taking down the entire bank to do it.
SPEAKER_00Trevor Burrus, which means when you pair that flexible foundation with Audacks' rapid front end, you are basically paying down your technical debt incrementally.
SPEAKER_01Aaron Powell Yes, piece by piece.
SPEAKER_00You don't have to migrate every single customer and every single product to the new core on a single terrifying weekend.
SPEAKER_01Aaron Powell No more big bang launches.
SPEAKER_00Right. You can move, say, the retail checking accounts over to 10X while leaving the commercial loans on the old legacy system for another year. And the customer who is looking at the Odx front end app has absolutely no idea anything is changing underneath.
SPEAKER_01Aaron Powell And that incremental approach is the key to true adaptability. And going back to Karthik's point in the interview, the goal of transformation today isn't just to match the current state of the market.
SPEAKER_00Because the market keeps moving.
SPEAKER_01Exactly. There is no guarantee what the market will demand in 2030. You are building for the unknown. This modular partnership prevents vendor lock-in, and it prevents the bank from freezing its architecture to a specific point in time.
SPEAKER_00So let's look at what this actually unlocks operationally for a bank. When you reduce that technical debt and move to this microservices approach, you suddenly have the capacity to launch completely new business models. Absolutely. The conversation highlights banking as a service or bus as well as digital wallets and super apps.
SPEAKER_01Which, not coincidentally, are the exact arenas where traditional banks have been losing so much ground.
SPEAKER_00Right. But let's let's clarify what banking as a service actually means in this context for our listeners. Good idea. Because of this new architecture, the bank can now package its core functions like issuing a loan or verifying an identity and expose them via API to third-party companies.
SPEAKER_01Right, outside the bank.
SPEAKER_00So a non-financial company like a retail brand or an airline can just embed the bank's lending products directly into their own checkout process.
SPEAKER_01Seamlessly. You really cannot.
SPEAKER_00Oh.
SPEAKER_01But as banks rush to launch these embedded services across various borders, they run into a massive operational bottleneck, which is regulatory compliance. And this brings us to a really critical capability of the 10x platform that we need to highlight, which is compliance as code.
SPEAKER_00Compliance as code. Now, this is a concept that sounds great on a marketing brochure, but I really want to understand the mechanics of it. How does software actually manage international banking regulations?
SPEAKER_01Well, consider the traditional deployment cycle first. Okay. If a bank wants to launch a new digital wallet in a new market, they typically have to route the product through an absolute army of compliance officers and lawyers.
SPEAKER_00Oh, I'm sure.
SPEAKER_01These teams have to manually review the product against a massive PDF of localized regulations. You know, data residency laws, KYC requirements, transaction limits. It is a very slow, deeply human, and error-prone process that drags out development timelines.
SPEAKER_00Aaron Powell, which is just another reason those legacy transformation projects took four years to launch.
SPEAKER_01Exactly. What compliance's code does is automate that regulatory oversight directly into the CICD pipeline.
SPEAKER_00The continuous integration and continuous deployment pipeline.
SPEAKER_01Right. Instead of a human reading a regulation and checking a box, the rules of a specific jurisdiction are translated into automated testing scripts.
SPEAKER_00Okay, so wait. If a developer tries to push a new feature that, say, violates data privacy laws in Singapore by routing user data through an unauthorized server, what actually happens?
SPEAKER_01The code simply fails the automated check.
SPEAKER_00It just fails.
SPEAKER_01It cannot compile and it cannot be deployed to production. The guardrails are built directly into the engineering workflow itself. Wow. It fundamentally removes the friction between moving at top speed and remaining legally compliant across diverse, highly regulated markets like AIPAC or Europe or the Middle East.
SPEAKER_00That is a remarkable shift in operational leverage. I mean, you are turning compliance from a manual roadblock into an automated safety net.
SPEAKER_01There you go.
SPEAKER_00So synthesizing all of this, what does this all mean? When we look at the core tension we started with, the desperation of these massive institutions to modernize versus the catastrophic scars of their past attempts, the through line here is clarity of structure. Yeah. True digital transformation does not require an institution to violently tear down its own walls while it's still trying to operate inside the building.
SPEAKER_01It requires an abandonment of the all-or-nothing felt.
SPEAKER_00Precisely. It is about strategic modular layering. You utilize an abstraction layer like Audacks to immediately launch responsive, competitive digital channels in a matter of months. You stop the bleeding and then, shielded by that modern interface, you incrementally migrate your rotting foundation over to a cloud native engine like 10X. You pay down your technical debt piece by piece without ever freezing your ability to serve your customers or innovate in the market.
SPEAKER_01The broader takeaway here is really about recognizing structural patterns. You know, the legacy institutions that survive this current wave of financial disruption will not be the ones that spent the most sheer capital tearing themselves apart in mega projects. No. The survivors will be the institutions that embraced humility, recognized the limits of their own monolithic structures, and redesign themselves for constant iteration. In the modern economy, survival strictly belongs to the modular.
SPEAKER_00Survival belongs to the modular. I think that is the absolute perfect lens to view this through. Yeah. And that leaves us with a final lingering question for you to ponder as you navigate your own professional landscape today. We spent this time analyzing how highly regulated, deeply entrenched banking giants are utilizing APIs and two-phase strategies to quietly escape their own paralyzing technical debt. So zoom out and look at the systems operating around you. What other ancient, stubborn institutions in your life, whether it's your local government infrastructure, the healthcare network you rely on, or perhaps even the core operational systems within your own workplace, are currently hiding behind a shiny superficial app while a decaying foundation threatens to collapse underneath.
SPEAKER_01It's everywhere once you start looking.
SPEAKER_00It really is. Where else is the heavy stone building just waiting for a modular circuit board to finally pull it into the future? Thank you for joining us for this deep dive. Keep observing the architecture of the world around you. Keep analyzing the systems and keep asking the hard questions. We'll see you next time.