Scale Drives Banks to Unbundle
Shamir Karkal, co-founder and CEO of Sila, on the modern payments stack
Scale pushes banks to unbundle their own stack, because a tiny improvement in one payment workflow can erase whole teams of manual work. Smaller banks usually buy a full core from Fiserv, FIS, or Jack Henry and use the bundled modules that come with it. Large banks move differently. They swap in the best ACH, card, ledger, or fraud tool for each job, because at billions of dollars a day, better software creates immediate labor savings and better control.
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This is the same build versus buy split showing up in fintech infrastructure. Early stage fintechs want one API that gets them live fast. As they grow, weak spots in returns, chargebacks, fraud, and reconciliation get expensive, so they start replacing generic modules with specialist tools.
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The practical reason is not elegance, it is operating leverage. A large bank may have millions of accounts and many back office staff handling ACH exceptions, disputes, and file operations. If a better processor cuts exception handling enough to remove hundreds of jobs, custom integration pays for itself.
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Legacy banks still carry old cores underneath all this customization. That means the winning vendors are often not full replacements. They are the products that can sit on top of old file based systems, expose modern APIs, and automate painful workflows without forcing a full core conversion.
The next phase of fintech infrastructure is likely to mirror this pattern. Consolidated platforms will keep winning with smaller and newer customers, while the largest fintechs and banks will keep pulling apart the stack and rebuilding it around best in class components. The biggest long term prize goes to vendors that become the default specialist layer inside those custom stacks.