Real-time cores
Real-time cores inbanking and fintech.
Banks, fintechs and new banks are moving deposits, lending and partner programs onto cloud-native cores that post transactions as they arrive. Most get there in stages, and for partner programs the model a bank chooses decides who keeps the ledger.
The market
Few banks replace a core outright. Most modernize around it.
Full replacement is the riskiest and most expensive option, and it's rare. Banks more often add a new core beside the old one and move business onto it over time.
at large banks and fintechs surveyed plan to modernize with a second core beside the old one; 30% plan a digital-native bank, and almost none a full replacement. A vendor's survey.
FIS, April 2025expect to convert at their next core contract renewal, and 69% expect to stay; 35% are dissatisfied with their core provider.
ABA, February 2025The Kansas City Fed calls a full replacement the most risky and expensive option, at a cost of millions.
Federal Reserve Bank of Kansas City, 2024for one regional bank's component-by-component move to a new core, about three times longer than it planned.
American Bankerfiled with the OCC in 2025, with six de novo banks conditionally approved, and more fintech approvals in 2026.
Banking Diveapplications the FDIC approved in the 12 months to September 30, 2026, against 7 in all of 2025.
FDIC application activityHow banks adopt
Four ways banks bring in a real-time core.
Each puts the new core into production on a smaller scope first, so the bank learns to run it before the largest conversion.
One product line first
Start a single line on the new core, such as SBA lending or a new deposit product, and move the rest once it's proven. One SBA lender did this between 2020 and 2021.
A digital brand
Launch a digital bank brand on the new core, then convert the whole bank to it. One community bank took that route from 2020 to 2025.
Component by component
Replace lending, then deposits, with the new core running beside the old one until the last product moves. The ABA Banking Journal on progressive modernization.
A partner program
Run fintech and embedded programs on a core the bank controls, apart from the main core. One sponsor bank chose a real-time core for its embedded strategy in 2025.
A full replacement in one conversion is the fifth option and the rarest. The core conversion guide.
Embedded banking and BaaS
The difference is who keeps the ledger.
Regulators use the two terms loosely. We separate them by who keeps the ledger: in banking as a service, a fintech or middleware provider records who owns what in a sponsor bank's pooled accounts; in embedded banking, the bank keeps each customer's account on its own core and delivers the experience inside a partner's platform or its own portal.
| Banking as a service | Embedded banking | |
|---|---|---|
| Ledger of record | The fintech or a middleware provider | The bank's core |
| Accounts | Pooled for-benefit-of accounts at the sponsor bank | Each customer's own account or sub-account on the bank's core |
| Balances | Reconciled to the provider's records, often daily | Current in the bank's own system |
| Onboarding and BSA/AML | Often delegated to the fintech, under the bank's oversight | The bank's controls, applied through its APIs |
| The experience | The fintech's app | A partner's platform, or the bank's own portal |
| If a provider fails | End users can wait while records are rebuilt | Balances stay in the bank's records |
Embedded banking still involves third parties, and the agencies' third-party risk guidance applies to both. The agencies' 2024 request for information describes the gap: in many of these arrangements the fintech keeps the system of record, and the bank's core holds only pooled accounts for the benefit of end users.
How Ignite supports you
How we help with a move to a real-time core.
We've partnered with several banks to implement Finxact, and the same planning, integration and conversion work applies to any real-time core.
Readiness and phasing
What changes for the institution, what stays batch, and which scope goes first. Moving to a real-time core.
Partner program ledgers
How a partner program's accounts, limits and reconciliation sit on the bank's own core.
The integrations
Rails, data pipelines and monitoring feeds, built and tested around the core.
Use cases
Where embedded banking shows up today.
Most embedded programs put a bank's account, card, payment or loan inside software a business or consumer already uses. Each example links to the program's own disclosure.
Business accounts in software platforms
A commerce platform's business account and card, with the funds held at a bank. Shopify Balance, 2026.
Lending at the point of need
Working capital offered inside a restaurant platform, issued by a bank and repaid from daily card sales. Toast Capital, 2026.
Marketplace payouts
Earnings paid out after every trip or sale to a card the platform offers, issued by a bank. Uber, 2026.
Treasury inside the ERP
Balances, statements and reconciliation delivered by a bank inside the client's own ERP. Oracle and J.P. Morgan, 2025.
Accounts inside accounting software
A small business checking account offered inside bookkeeping software, provided by a bank. QuickBooks, 2024.
Virtual accounts for clients
Sub-ledgers under one physical account, so a business can track and reconcile money by customer, property or program. J.P. Morgan, 2026.
In 2022 Bain projected U.S. embedded finance transactions would pass $7 trillion by 2026, from $2.6 trillion in 2021; estimates vary widely. Bain, Embedded Finance.
The regulators
What regulators have done about partner programs.
Most enforcement actions against sponsor banks were about BSA/AML and third-party risk management. A middleware provider's collapse in 2024 put the ledger itself in view. Since 2025 the agencies' posture has eased.
- 2022-24Consent ordersThe OCC, the FDIC and the Federal Reserve put at least ten banks with fintech programs under enforcement actions. Banking Dive's list.
- Jun 2023Third-party guidanceThe agencies issued joint guidance on managing third-party relationships, fintech partners included. The guidance.
- Apr 2024A middleware failureSynapse filed for bankruptcy. The court-appointed trustee put the gap between funds held and what end users were owed at $65 million to $96 million. The trustee's report.
- Jul 2024A joint statementThe agencies warned that a bank relying on a third party for the deposit system of record may be unable to determine its own deposit obligations. The statement.
- Sep 2024A proposed ruleThe FDIC proposed that banks keep records of each owner of pooled custodial accounts and reconcile them daily. It remains a long-term item with no final date. Its status.
- 2025-26An easingTwo sponsor-bank orders were terminated in late 2025, and a September 2026 proposal would replace the 2023 guidance and the 2024 statement; new BSA/AML actions still appear. The proposal.
Who is moving
Banks, sponsor banks, fintechs and new charters.
Each comes to a real-time core for a different reason.
Established banks
Community and regional banks
Modernizing in stages, often starting with digital, lending or a partner program, and converting deposits last.
Sponsor banks
Bringing partner programs' accounts onto a ledger they control, so they can show what each end user owns. Some built their own real-time cores for this. Column, 2022.
New charters
Fintechs taking a charter
Seeking control of deposits, payments and the ledger. The OCC has conditionally approved national bank and trust charters for several since 2025. American Banker's tracker.
De novo banks
Usually digital-first, but not all on a cloud-native core: of six de novos surveyed in 2022, one chose one. American Banker.
Partner programs
What a real-time core changes for partner programs.
A core that posts as transactions arrive, with every function behind an API, lets the bank keep the ledger for its partners instead of reconciling to someone else's.
The ledger
An account for each end user
Accounts or sub-accounts on the bank's core for every customer of every partner, rather than one pooled balance.
Balances the bank can show
What each customer owns, at any moment, from the bank's own records.
If a partner keeps the records
The FDIC's proposal would allow it, with the bank holding direct, continuous access, reconciling daily and validating the records independently. The proposal.
Operations
Reconciliation as it happens
Partner activity posts to the bank's core, so the bank reconciles against its own ledger, not a file from the partner.
Limits and holds in the core
Transaction limits, holds and restrictions set by the bank and enforced on every posting.
Partners and rails
Events to partners
Partners follow their customers' accounts through the core's events instead of overnight files.
Instant payments
FedNow requires funds be made available at any hour but doesn't prescribe how; a memo post qualifies. A real-time core removes the memo-post layer. The FedNow readiness guide.
Further reading
Where to read more.
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