A Survival Manual for Banks that cannot afford another Failed Transformation.
Core modernisation is no longer a side project. It is the difference between staying relevant and becoming invisible plumbing in someone else’s platform.
Rip Out the Core is a book about how to move from brittle, monolithic legacy to modular, platform enabled and eventually coreless banking without blowing up your bank or your career on the way.
This did not begin as a grand industry theory. It began with a flooded kitchen, a broken dishwasher and a phone call from my daughter telling me the floor was covered in water.
I was standing in a glass meeting room talking to a bank about modernising its core, while picturing water seeping into my own floorboards at home. Old plumbing. Silent leaks. Hidden damage behind neat cabinetry.
At some point it clicked. My kitchen was not a clever metaphor for banking. It was a mirror.
Most banks live with decades of invisible leaks. Ageing core systems that hold money, risk and overnight processes together. Layers of patches nobody fully understands. New digital channels laid over plumbing that creaks.
Everything works well enough until it does not. Then the floor goes.
Rip Out the Core is a survival manual for banks that know they cannot keep patching the same old systems and hoping for the best. It shows how to plan and execute progressive, capability led modernisation so you can keep serving customers, satisfy regulators and still move towards a genuinely coreless future.
Rip Out the Core is a survival manual for banks that know they cannot keep patching the same old systems and hoping for the best. It shows how to plan and execute progressive, capability led modernisation so you can keep serving customers, satisfy regulators and still move towards a genuinely coreless future.
We are rapidly heading towards a future supported by advancing GenAI tools. To support this shift here is an AI generated audio overview of the book, created with Google’s NotebookLM from the final draft manuscript.
Who This Book is For
Transformation Leaders
You are measured on growth, cost and time to market. You suspect the real blocker is not the app team but the forty year old core that never makes it into the board pack. You want a way to tie strategy, business capabilities and modernisation together so you can show real progress.
CIO's and Architects
You are responsible for a brittle stack that everyone blames and few truly understand. You want a realistic path from monolithic core to modular, multi core, event driven banking that does not rely on big bang fantasy weekends.
Fintechs and partners
You sell into banks that say they want platforms and ecosystems but still run RFPs like it is 2005. You want to understand how progressive modernisation really works from the bank side so you can be a real partner, not just another logo on a slide.
Discover What it Takes
How to use a Business Capability model to align strategy, architecture and delivery
How to define a smaller, sharper core and decide what really belongs in it
How to make honest build, buy or consume decisions instead of rebuilding yesterday’s monolith on tomorrow’s technology
How to run progressive, capability based modernisation waves instead of betting everything on a single go live
How to lay foundations for platform based and agentic banking without chasing every hype cycle
If you already have a scars-and-burnt-budget history with core replacement, the book is written very much with you in mind.
What Are They Saying
Dr Leda Glyptis
“Snappy, funny and painfully true. This is both user manual and emotional support for anyone stuck in the messy reality of core modernisation.”
Dr Leda Glyptis Author of Bankers Like Us and Beyond Resilience
If you read the acknowledgments and/or already know us in real life, you know that Pål and I share a couple of things.
A slightly quirky sense of humour (we think we are funny, that’s all that matters).
A deep fascination with and long tenure in core transformation.
And, now, a publisher.
And although I can take very little credit for how good this book is, I can take a little bit of credit for the fact that the book… is… because in the very early days when the idea can go either way… right time, right place and a conversation led to the introduction to the publisher and the rest is, as they say, history.
But not before I had the exact same conversation… first with Pål and then with our publisher: is this topic too niche?
Most ‘real life’ people don’t know what ‘core transformation’ means and they may come to the volume hoping it’s a new ab workout.
Most business folks, most bankers, would be hard pressed to name what their core is, inside their bank. Who their provider is, what the architectural choices may be.
And yet, every business folk makes decisions on the basis of that core system’s limitations… every banker (whether they realise it or not) has been conditioned by years of committees saying no and quarter after quarter of proposals being rejected or reframed to work around certain… givens… certain constraints… certain sacred cows.
And those cows?
Your core estate.
The thing that is literally at the core of your bank. Doing stuff that is not exciting or differentiating but without which you don’t have a bank.
So it is… core.
It is important.
And although it has not historically been an area of widely-held knowledge, that is a problem that needs to be addressed.
Because the world is shifting, banks keep failing in their transformation efforts and the reasons for the failures as well as the answers for what is needed for the future are invariably found (at least partly) in the core banking infrastructure that each bank carries.
Transforming that technology estate is hard work.
It often fails.
And no decision-maker in their right mind would choose to transform their core.
And yet, no business leader in their right mind would choose to take on the future with legacy problems and residual operational risk literally at the heart of their business.
These are not easy decisions.
And even after the hard decisions have been made, these are not easy projects.
Help is needed but, thankfully, help is at hand.
This book is part user manual for those engaging on the journey and wanting to genuinely learn from the successes and errors of the past… and part self-help book for those who are navigating the journey ok but would like to feel less alone in the process occasionally.
It is snappy. It is funny. It is… true.
And in its truth, I hope, it will support and sustain those doing the work. And hopefully also inspire those still sitting on the fence.
Because core modernisation is a scary choice.
But a necessary one.
So read this book if you are about to start the journey. Read this book if you are on the journey and definitely read this book if you need that final push to get on the journey.
Dr Leda Glyptis – Author of Bankers Like Us and Beyond Resilience
“An urgent call for incumbents to stop hiding behind legacy cores and asset size and go all in on digital and agentic banking, using no-core principles and Pål’s kitchen disaster as a brutally honest lens on what it will take to survive the next era.”
Brett King Futurist & Author of Branch Tomorrow, and Bank 2.0-5.0 Series
Using Pål’s kitchen disaster analogy, I thought I’d get into the idioms. In Australia where I grew up, there’s a saying that you are “throwing everything but the kitchen sink” at a problem – it signifies using every possible resource, idea or effort to achieve a particular outcome. In the instance of banking, this could never be more true than today. Banking is undergoing a once in a century shift, a fundamental reshaping of where banking lies in our communities and economies, redefined by technology capabilities and experiences. In Rip Out the Core, Pål explores the efforts to patch existing silo’d technologies and organizational structures as largely futile with the massive emerging requirements we see for successful transformation today. In the industry there are plenty of approaches to this problem from core replacement strategies, to side-car cores, and even core-less middleware layers that are popularized. In the meanwhile, all of the fastest growing banks in the world are new entrants, digital native players with highly scalable, super cost-efficient customer acquisition capabilities. The largest bank in China by customers is WeBank today, the largest wallet ecosystem in the world Alipay, the largest bank in Latin America NuBank, who is also the largest company in Brazil by market capitalization. Revolut topped out at 65 million customers this year, making it the largest bank in the EU by customer numbers, and with a valuation of $75 Billion after their last round, one of the highest valued neobanks globally. N26 is either the second or third largest bank in the German market depending on how you measure the numbers Just a decade ago as these neo-banks were getting started most incumbents were claiming this was all ‘much ado about nothing’. The excuses were… 1. They are only growing that fast because they are so small 2. They will never be able to manage risk as well as the incumbents 3. They aren’t likely to be profitable any time soon For all of these objections to the neo-banks of the 2010s we now see that these arguments were simply false. The Neos beat incumbents on customer growth, on revenue growth and on total number of customers globally today by a significant margin. The top-20 retail fintechs command over 4 billion customers, while the top-20 retail banks top out at 2.7 billion customers. There’s an argument to be made that digital banks have already won the day-to-day banking battle for dominance globally. What’s left to argue today? “Yes, but they don’t have the asset size…” That’s true, although I wonder how your asset size as an incumbent is likely to help you become a truly transformed, digital native and AI-capable bank for the next decade? It’s likely not something that will help you in these objectives as a bank. This is why Pål’s book is so timely today. To compete in the banking era that comes next, you can’t be torn between your objective to support the traditional business and the emerging business. You need to go all in on digital or you will be giving away market share, mind share and soon asset share to more agile digital competitors. You need to throw everything but the kitchen sink at this effort, or you are risking obsolescence. The next era of banking is Agentic, AI-based banking. Your core is your greatest limitation if you are an incumbent. You can’t run agentic processes on a legacy core. You can’t run smart contracts on a legacy core. You can’t even run tokenized operations using fiat currency, the basic unit on your core. If you want to adapt to what comes next, you need to think as if you are building a new bank from the ground up. You need to rip out the foundations of the old, and imagine something completely new. Anything short of this won’t be enough to get you there. Thank you Pål for bringing us to this moment and giving us a clear vision of where we need to go
Brett King – Futurist & Author of Branch Tomorrow, and Bank 2.0-5.0 Series
“Not another glossy transformation story. A practical blueprint and toolkit for building a future-proof institution when ripping everything out is not an option."
In the relentless pursuit of innovation, the true entrepreneur isn’t merely content with identifying problems; they’re driven to rip out the broken foundations and build something fundamentally better. For too long, the banking industry has been bogged down by legacy—not just in its code, but in its very mindset. We’ve seen grand visions crumble under the weight of outdated systems, ambitious projects drowned by “technical debt,” and promising ideas suffocated by processes designed for a bygone era.
This isn’t a book for those who want to patch up the cracks or simply add a fresh coat of paint. This is a battle cry for the bold, a playbook for the builders, and a survival guide for those who understand that in today’s landscape, inaction is the riskiest strategy. My dear friend Pål Krogdahl, with the wisdom of a seasoned architect and the pragmatism of an engineer, doesn’t just diagnose the ailments of core banking; he hands you the blueprint and the toolkit to construct a future-proof financial institution. What resonates most deeply for an entrepreneurial spirit within these pages is the call to action that emerges from crisis. Like the unexpected disaster in Pål’s kitchen, many financial institutions face a moment of truth where the old simply cannot hold. But where some see insurmountable chaos, Pål sees a strategic pivot point. He doesn’t advocate for reckless demolition, but for deliberate, capability-driven transformation that prioritizes outcomes, leverages ecosystems, and embraces continuous learning.
This isn’t theory; it’s a practical path born out of experience. It’s about building with purpose, partnering smart, and progressing with confidence. It challenges you to think modularly, to seek agility over monolithic control, and to turn the complexity of legacy into an opportunity for true differentiation. Whether you’re a challenger looking to outmanoeuvre incumbents, or an established player determined to reinvent from within, this book offers the strategic clarity and tactical guidance you need.
It’s time to stop mopping the floor. It’s time to truly “rip out the core” of what holds you back and build a platform-enabled future that is not just more efficient, but infinitely more innovative and simply game changing. This book is your essential guide to that journey. Be bold and start building.
“No silver bullets and no snake oil. Just hard-won lessons on how to move from monolithic legacy to platform-enabled and eventually agentic banking without breaking the bank on the way.”
In the early part of my career in Lloyds Bank I worked and later led a support team for many of the banks systems. As we hadn’t written the code we became highly critical not only of the code but the design of systems – many which had been running already for decades. However in support, hindsight is 20 20 vision we used to say, if only the original developers knew what we saw today, they’d surely have developed it differently. Though it wasn’t always possibly as more often than not a better approach needed technology that wasn’t previously available.
Fast forward forty years, and I've watched this movie play out countless times. Different banks, different geographies, different vendors, but the same fundamental mistakes. The core banking replacement project announced with fanfare. The consultants descending like locusts. The promises of transformation. And then, more often than not, the quiet retreat to "phased modernisation" when reality sets in – which is usually just expensive code for "we're going to patch the old system for another decade and hope for the best." I’ve always been for revolution but had to endure “step-wise refinement”.
So when Pål asked me to write this foreword, I'll admit I was initially skeptical. A book about core banking transformation? Really? I don’t believe in magic.
But then I read his manuscript, and something clicked. Not because Pål has invented some wonderous solution that will make legacy banking systems disappear overnight – he hasn't, and frankly, anyone promising that is selling snake oil. What Pål has done is something far more valuable and far more honest. He's given us a survival manual written by someone who's actually been in the trenches, who's lived through the disasters, and who's learned that transformation isn't about ripping everything out in one dramatic gesture – it's about understanding what you're actually trying to achieve and being brutally honest about where to start.
The flooded kitchen metaphor that runs through this book isn't just clever storytelling, though it is that. It's a perfect illustration of how most banks approach their technology problems. They see water on the floor and immediately want to demolish the entire kitchen, order the most expensive appliances, and hire an architect to design something worthy of a magazine cover. What they should be doing is finding the leak, understanding why it happened, and fixing the actual problem before anything else.
I've been advocating for what I call "agentic banking" – the idea that banks need to move from siloed systems making independent decisions to a unified "single brain" where intelligent agents collaborate in real-time. It's a vision I first articulated back in 2013 at Temenos, though the technology to properly implement it didn't exist then. I was simply too far ahead of the available technology. Today, the landscape has changed dramatically. We have the compute power. We have the AI capabilities. We have the architectural patterns. What we don't always have is the will to transform properly or the practical guidance on how to actually get there.
That's where Pål's Platform Enabled Banking Transformation approach becomes essential. You see, I can tell you what the future of banking should look like – and I do, regularly, much to the occasional dismay of traditional vendors – but the question everyone asks is: "How do we get from here to there without destroying the bank in the process?". This is ultimately the billion dollar question for bankers.
Pål's answer is refreshingly pragmatic. He's not promising a silver bullet. He's not selling you a framework that requires you to hire an army of certified consultants. He's showing you how to think about the problem differently, how to plan properly, how to choose what to build versus what to buy, and critically, how to avoid the common failure patterns that have sunk so many well-intentioned transformation programs.
What I particularly appreciate about this book is that Pål doesn't shy away from the complexity. Banking is complicated. Not because bankers want it to be – most would love simpler systems – but because decades of regulation, acquisition, product innovation, and technical debt have created an almost impossible tangle of interdependencies. Anyone who tells you transforming that is easy is either naive or hasn't actually tried to do it.
But here's the thing I've learned over my four decades in this industry: complexity isn't an excuse for inaction. The banks that are winning today – whether that's the neo-banks offering instant digital card issuance when your partner loses her wallet abroad, or the enlightened incumbents who've actually managed to modernise – they're not winning because they found a way to avoid complexity. They're winning because they found a way to manage it systematically, to break it down into achievable components, and to deliver real value incrementally rather than waiting for some mythical "big bang" go-live that never quite arrives.
Pål's kitchen renovation taught him what many transformation leaders learn the hard way: you can't just tear everything out and rebuild. You have to live in the house while you're renovating it. The bank has to keep banking while you're modernising it. Customers still need their payments processed. Regulators still need their reports. Staff still need systems that work. The art isn't in the demolition – any fool can destroy things. The art is in the careful, methodical, strategic rebuilding that doesn't bring the whole structure crashing down.
In this book, you'll find Pål's battle scars turned into practical wisdom. The war stories are real – he's lived them. The frameworks are tested – he's used them across multiple banks. The advice is hard-won – he's made the mistakes so you don't have to.
You'll also find him addressing something I've been banging on about for years: the shift from manufacturing to distribution in banking, the rise of platforms and ecosystems, and the reality that future customers won't "open a banking app" – they'll interact with AI agents that seamlessly orchestrate their financial lives across multiple providers. Pål gets this. His vision of what he calls "coreless banking" aligns beautifully with where the industry needs to go, but crucially, he shows you the bridge between today's monolithic reality and tomorrow's composable future.
I should warn you, though – this isn't a comfortable read if you're looking for validation that your current approach is fine. Pål, like me, doesn't believe in sugar-coating the situation. If your bank is still treating digital transformation as an IT project rather than a business transformation, you're going to fail. If you're still thinking you can buy your way out of technical debt with one vendor's "integrated suite," you're going to be disappointed. If you're planning a big bang core replacement without proper discovery, architecture, and phased delivery, I'd suggest you start updating your CV now.
But if you're ready to think differently, to embrace the hard work of proper transformation, and to approach modernisation as a journey rather than a destination, then this book is your roadmap. Pål has done what few authors in this space manage – he's made a deeply technical subject accessible without dumbing it down, and he's provided practical guidance without pretending there are easy answers.
I've known many consultants and architects over the years who can talk a good game about transformation. Pål is one of the few who's actually delivered it, repeatedly, and learned from both the successes and the failures. His experience shows on every page.
The banking industry stands at an inflection point. The pace of technological change – AI, quantum computing, agentic systems, embedded finance – is accelerating beyond what most banks are prepared for. Legacy systems that have been "good enough" for decades are suddenly becoming existential threats. The gap between digital leaders and laggards is widening. And customers, frankly, don't care about your technical debt. They just know that some banks can issue them a digital card in minutes while others still require them to wait a week for plastic in the mail.
This book won't make transformation easy – nothing can do that. But it will make it possible, which is infinitely more valuable. It will help you avoid the common pitfalls. It will give you a framework for thinking strategically about modernisation. And it will remind you that sometimes the best way to understand complex systems is to think about something as simple as a flooded kitchen.
I'm just saying that if you're serious about transforming your bank's core systems, you need to read this book. Not because Pål has all the answers – no one does – but because he's asking the right questions and sharing the hard-won wisdom from actually doing the work. That's worth far more than another PowerPoint deck full of aspirational architecture diagrams that bear no resemblance to the messy reality of banking transformation.
As banks move toward the platform-enabled, agent-driven future that both Pål and I advocate for, this book provides the practical bridge between vision and execution. It's about time someone wrote it. Great work my friend.
“If you are a CTO, chief architect, transformation executive or anyone responsible for deciding how a bank evolves over the next decade, you should read Rip Out the Core."
Chris Skinner Author and commentator, The Finanser Ltd
Every few years someone publishes another book explaining how banks should modernise their core systems. Most disappear without leaving much of a trace. They tend to be written by consultants, full of diagrams, acronyms and methodologies that promise certainty in a world where certainty doesn’t exist. They tell you what the destination looks like but rarely explain how to survive the journey. Pål Krogdahl’s Rip Out the Core is different. Not because it has discovered some revolutionary new way to modernise banks. There isn’t one. If there were, the banking industry would have done this years ago. It is different because it is written by someone who has spent decades in the trenches rather than the conference circuit. Every chapter feels like it has been earned through failed programmes, difficult meetings, political compromises and the slow, often frustrating reality of changing institutions that were never designed to change. The title is provocative. The message isn’t. In fact, one of the biggest strengths of the book is that it dismantles the mythology surrounding core replacement. The answer isn’t to rip everything out. The answer is to understand what the core actually is, what should remain, what should disappear and how to modernise whilst the bank continues to function. After all, customers still expect their salaries to arrive tomorrow morning, regulators still expect accurate reporting, and treasury still expects the numbers to balance. You don’t get the luxury of closing for refurbishment. That sounds obvious, yet banking has spent the past thirty years repeatedly convincing itself otherwise. I’ve watched billion-dollar transformation programmes begin with enormous optimism before collapsing under the weight of unrealistic ambition. Everyone wants the perfect target architecture. Nobody wants to spend years migrating to it. Somewhere between those two realities sits the graveyard of failed core replacement projects. Krogdahl understands that graveyard because he’s walked through it. Throughout the book, Krogdahl likens bank core systems upgrades to a kitchen. You keep fixing the leaks, rather than dealing with the plumbing. The kitchen renovation analogy works well although reading about dishwashers and plumbing hardly sounds like the basis for a serious discussion about banking architecture. Yet it becomes an effective reminder that technology transformation is rarely about technology. It is about sequencing, planning, patience and understanding that you cannot demolish the room whilst people are still living in the house. That lesson alone is worth the price of the book. Where Rip Out the Core really distinguishes itself is in refusing to treat technology as the answer. Capability models, platform architectures, APIs, ecosystems, AI and cloud all appear, but they are presented as tools rather than objectives. Too many transformation programmes still begin with a technology decision and only afterwards ask what business problem they are trying to solve. Krogdahl reverses that logic. Start with capability and outcomes, then work backwards into architecture. It sounds simple because it is. It is also astonishing how rarely banks do it. The book then moves into open banking, embedded finance, AI agents and ecosystem orchestration, all of which are steadily redefining what banks actually do. The interesting question is no longer whether banking changes but whether traditional providers can change quickly enough to keep up. This is where the book feels timely. Legacy has become fashionable to discuss but remains deeply misunderstood. People often think legacy means COBOL or mainframes. It doesn’t. Legacy is accumulated decision-making. It is decades of compromises, acquisitions, regulatory responses, tactical fixes and organisational politics embedded inside software. Replacing code is relatively easy but replacing thirty years of institutional behaviour is much harder. The book understands this distinction extremely well. That doesn’t mean it is beyond criticism. At times the book tries to cover almost every aspect of banking transformation. There are moments where a firmer editorial hand could have reduced repetition and sharpened the pace. Some chapters explain concepts that most experienced transformation leaders will already know, whilst others assume a level of architectural knowledge that many board members don’t have. Sitting somewhere inbetween executive strategy and technical handbook occasionally leaves the audience slightly blurred. I also found myself wanting more war stories. The fictional NOIT Bank provides continuity, but some of the strongest parts of the book are where Krogdahl’s own experience quietly surfaces beneath the text. Those moments feel authentic because they are authentic. More of those stories and fewer frameworks would have made a good book stronger. Nevertheless, none of that changes my overall view. What makes Rip Out the Core stand out is its honesty. It never pretends transformation is easy. It never promises quick wins or silver bullets. It repeatedly reminds the reader that banking transformation is difficult because banking itself is difficult. That realism is refreshing in an industry increasingly dominated by simplistic AI narratives and marketing slogans about digital disruption. There is another reason I like this book as it arrives at exactly the right moment. Artificial intelligence is forcing banks to rethink architecture from first principles. Agentic systems, real-time decisioning, composable platforms and intelligent automation all assume clean, modular, event-driven foundations. None of those ambitions sit comfortably on fragmented architectures built for overnight batch processing. Whether banks like it or not, the conversation about core modernisation has become the conversation about competitive survival. That makes this book considerably more relevant than it might have been five years ago. If you are a CTO, chief architect, transformation executive or anyone responsible for deciding how a bank evolves over the next decade, you should read Rip Out the Core. Pål Krogdahl has written one of the better books on banking transformation that I’ve read in recent years because it avoids the trap that so many technology books fall into. It isn’t trying to impress you with cleverness. It is trying to help you avoid making expensive mistakes and, in banking, that may be the most valuable outcome of all.
Chris Skinner – Author and commentator, The Finanser Ltd
“Rip Out the Core is essential reading for anyone navigating the stubborn challenges of banking core modernization. Despite substantial investment, many institutions have failed to extract meaningful business value hampered by overruns, delays, and results that leave them no stronger than before. Sparked by a flooded kitchen that mirrored the chaos of real banking programs, the book reframes the problem through an organizational lens, revealing that adapting the way we work is inseparable from lasting technological change. For banking executives and transformation leaders weary of endless patching, this clear-eyed manual transforms hard-won industry experience into precise, actionable progress." - Paolo Sironi, IBM and Author
“Pål is a natural storyteller. I laughed far more than I expected to, and even as someone mostly clueless about finance, I knew I was reading a good book. I came away smarter." - Elaine Stirling, author of The Corporate Storyteller: A Writing Manual & Style Guide for the Brave New Business Leader
