Next-Gen Core Banking with Microservices and Serverless: Reducing Latency Across High-Volume Transactions
Author(s): Saikrishna Garlapati
Publication #: 2601027
Date of Publication: 29.01.2026
Country: United States
Pages: 1-10
Published In: Volume 12 Issue 1 January-2026
DOI: https://doi.org/10.62970/IJIRCT.v12.i1.2601027
Abstract
The increasing sentiment of digitization in the financial industry is swiftly transitioning core banking technologies towards faster, reliable, and resilient systems. This is being demanded at scales that have never been experienced before, especially under unpredictable and high‐volume transaction demands. Established legacy-based monolithic architectures now face more challenges to support the increasing demands for near-real-time processing and elastic scalability. The challenges are seen in significantly rising latencies, heavy change management procedures for every modification required, and excessive system downtimes during deployment. The move towards a hybrid, cloud‐native architecture, based on microservices and serverless principles is seen as a step that can allow institutions to create modular platforms that can provide further benefits: significantly increase end‐to‐end execution latencies, allow independent scaling of transactional elements and components, and continually drive innovation. This paper presents a systematic exploration of the principles and technical approaches for next‐gen core banking design. It identifies suitable and medium-level reference hybrid architecture for financial institutions to achieve subsystems processes of <300ms transactions, with multi‐thousands TPS. It analyzes suitable architecture deployment using microservices, EVENT‐DRIVEN, serverless edge execution scenarios, distributed data localities, among others for the core banking to achieve overalls. Through a detailed discussion on digital frameworks, architectures, and current best-of-breed use cases, the research provides references on how next-gen core banking architectures reshape deployment areas including security, data management, and compliance functionalities. It emphasizes the growing need for financial institutions and organizations to address functional areas and challenges that reduce operational friction points and enhance costs-effectiveness alongside differentiating, low‐latency customer engagements with continued agility for compliance and advanced security mechanisms.
Keywords: Core banking, microservices architecture, serverless computing, latency reduction, cloud-native systems, transaction throughput, API management, digital transformation, financial services, compliance, scalability.
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