Starting the Modernization Journey with a Digital Twin: A Progressive Approach

Modernizing a legacy system is one of the most critical challenges for financial institutions today. Traditional core banking replacement projects, while necessary, are often long, expensive, and risky—taking years to complete before delivering measurable value. Meanwhile, competitors like NuBank and C6 Bank are reshaping the financial landscape, demonstrating how modern technology can drive agility, innovation, and customer-centric experiences.

NuBank and C6 are not just success stories—they’re wake-up calls for every region. Their ability to attract customers and achieve higher market capitalizations than many traditional banks in the same markets underscores a profound shift in the industry. This isn’t limited to Brazil or Latin America—these banks have become global inspirations, fueling a wave of similar challengers.

No bank is immune. Whether or not NuBank or C6 operates in your region, their influence inspires others to follow their lead. Banks that fail to adapt risk falling behind as the market evolves. Investors, too, have grown skeptical of promises like “in five years, we’ll be like NuBank or C6.” Instead, they demand progressive evolution with visible outcomes. Delivering early results reassures stakeholders and can even accelerate stock valuations as confidence grows in the bank’s ability to adapt and thrive.

The Digital Twin: A Smarter, Safer Way to Modernize

A Digital Twin offers financial institutions a progressive, low-risk approach to modernization. Unlike traditional core replacement projects that can take five or more years to deliver results, the Digital Twin enables banks to modernize incrementally, delivering value early and consistently.

It’s a strategy for every bank, in every region, to stay competitive in an industry being reshaped by modern challengers, showing early results.

How the Digital Twin Supports Progressive Modernization

1. Working Alongside Legacy Systems, Not Replacing Them

The Digital Twin complements rather than replaces legacy core systems. It handles modern workloads such as real-time payments, high-frequency transactions, fintech accounts in sponsor banks and customer-friendly interfaces. By taking over these functions, the Digital Twin reduces the reliance on the legacy system, migrating part of the workload to more cost-efficient, cloud-based infrastructure, including ARM-based servers, which offer significant cost advantages.

This shift delivers concrete, tangible results from the very first step of the modernization journey. Banks can reduce operational costs and free up resources previously constrained by legacy systems. Additionally, by isolating the legacy system from many day-to-day operations, the Digital Twin de-risks modernization efforts and ensures continuity while paving the way for safer, controlled core replacements.

This dual-system approach simplifies integration with external systems, shields customers from disruptions during modernization, and immediately demonstrates value through improved efficiency and cost-effectiveness.

2. A Controlled and Risk-Reduced Core Migration

With a Digital Twin, banks can migrate to a new core banking system gradually, testing each step thoroughly and minimizing downtime. Key advantages include:

• Multiple migration trials without customer impact.
• Seamless product and account migrations over weekends or low-demand periods.
• Customers experience a faster, more responsive, and highly available system while any underlying challenges remain invisible, preventing disruptions to their experience.

This ensures that while customers notice significant improvements, the modernization process remains smooth and does not affect their daily interactions. This approach significantly reduces the overall risk of core replacement.

3. Delivering Faster Results to Build Confidence

Inspired by the speed and innovation of NuBank and C6, traditional banks must demonstrate measurable progress early. The Digital Twin enables:

• Faster implementation of real-time payments and enhanced customer experiences.
• Operational efficiencies, such as reduced processing times and costs.
• Tangible results within months, rather than years, building confidence among investors, stakeholders, and customers.

These incremental wins prove the bank’s ability to adapt and deliver, boosting stakeholder trust and even accelerating stock valuations.

4. Accelerating Adoption of New Core Banking Systems

For core banking providers, the Digital Twin is not just a complement—it’s a catalyst for transformation. Many banks hesitate to migrate to new core systems due to risks of downtime, complex integrations, and disruptions to customer experience.

With the Digital Twin in place, these barriers diminish significantly:

• Banks can transition to new core banking systems with minimal hesitation, knowing the Digital Twin ensures operational continuity.
• Providers can consolidate their offerings to fewer—or even a single—modern core banking product faster.
• The reduced complexity and enhanced customer confidence accelerate migration timelines, helping providers solidify their client base.

This enables core banking vendors to modernize their portfolio while ensuring their clients experience a smoother and safer transition. The Digital Twin becomes an ally, not a competitor, driving adoption of modern core banking solutions.

The Urgency: Why Modernization Can’t Wait

NuBank and C6’s success stories aren’t isolated. They’re part of a global trend where modern challengers set new standards for agility, efficiency, and customer experience. Their rise demonstrates that the future of banking lies in modern technology, not legacy systems.

Every bank must recognize that the threat isn’t just from NuBank or C6—it’s from the next wave of competitors inspired by their success. Delaying action only increases the risk of falling behind, both in the market and in the eyes of investors.

Conclusion: A Wake-Up Call for Every Bank

Modernization is urgent, and the Digital Twin offers a progressive, low-risk path forward. By complementing legacy systems, delivering early results, and simplifying core migrations, the Digital Twin helps banks respond to the challenges posed by NuBank, C6, and their global imitators.

For core banking vendors, the Digital Twin accelerates adoption of their modern platforms by reducing migration risks for their clients. It’s not a competitor but a partner—one that ensures both banks and core providers remain competitive in a rapidly evolving industry.

This is not just about reacting to competition—it’s about positioning for long-term success. The future is here, and the time to start the modernization journey is now.