Modernizing Payments Without Disrupting Your Core

Executive Summary

Community banks, regional institutions, and credit unions are at a tipping point. Over 56% of community bank leaders say adopting emerging technologies is essential to staying competitive, yet high implementation costs, vendor limitations, and operational risks slow progress. Meanwhile, the demand for instant settlement, faster onboarding, and digital-first experiences accelerates.

But for most small and mid-sized institutions, ripping out core systems to “get modern” just isn’t realistic. It’s expensive, risky, and threatens the relationships defining your institution.

The good news? You don’t need an overhaul to move forward.

Today’s successful institutions choose a smarter path: adding purpose-built solutions that work with their core, embedding compliance intelligence, and modernizing payment infrastructure around existing systems—not through them. It’s about evolving with control, growing with clarity, and staying true to your charter while scaling for what’s next.

We’ll explore how credit unions and community-focused banks modernize on their terms—delivering faster payments and smarter, risk-based compliance without losing what makes them unique.

The Challenge: Urgency Meets Reality

Bank leaders face a pivotal moment. In the 2024 CSBS Survey, 56% of community bank executives identified emerging technologies as essential for competitiveness. But barriers persist:

• 46% of banks cite high implementation costs as their top barrier.

• 96% view cybersecurity risks as their critical internal concern.

• Regulatory burdens, third-party risks, and staff training complicate adoption.

• Vendor limitations stall innovation—over 80% of community banks rely on core providers, yet only half are satisfied with innovation pace.

Banks know they need to modernize, but fears about cost, complexity, and disruption hold them back.

A Smarter Way Forward: Incremental Modernization

You don’t have to choose between innovation and disruption. Today’s leading institutions are expanding their capabilities by integrating smart, purpose-built solutions around their existing systems—without replacing what already works.

➡️ An Embedded Solution That Works With Your Core

Avalo connects seamlessly with your current infrastructure—no core replacement required.

• Seamless access to modern payment rails

• Direct API connectivity and clear data visibility

• Embedded, automated compliance workflows

• Faster product launches and onboarding

It’s a smart, low-lift approach that delivers control, speed, and flexibility—without unnecessary complexity.

➡️ Modern Payment Standards and Rails

Modernization also means preparing for what’s next. Banks must be equipped to support:

• Instant payments (FedNow)

• ISO 20022 for richer, structured data

• Cross-border payments and real-time FX

With the right technology, these enhancements become additive—not disruptive.

➡️ Compliance as a Catalyst

Compliance shouldn’t be a burden. Avalo builds automation into your operations, with features like:

• KYCC (Know Your Client’s Customer)

• Automated AML detection with a risk-based approach

• Continuous, audit-ready transaction monitoring

Banks can confidently pursue fintech partnerships, onboard money-service businesses (MSBs), or provide correspondent banking—while staying fully audit-ready.

Takeaways from: Commerce and Portage Banks

Commerce Bank illustrates precision modernization. Their article, “Integrated Banking and Payment Solutions from Commerce Bank” (Feb. 16, 2022), describes phased implementation, avoiding risky core replacement while achieving:

• 24/7 transaction processing.

• Two new product launches per month.

• Smooth API/middleware integrations.

• Migration of 2.5 million customers and 6.9 million accounts—with zero service disruption.

Closer to home, community-focused Portage Bank chose a similarly smart path. Instead of costly core replacements, Portage integrated Avalo and Braid technology to:

• Serve as a U.S. banking partner for international regulated banks, enabling compliant transfers into the U.S.

• Streamline onboarding for fintechs, MSBs, and international banking partners.

• Preserve their existing core and the personalized service ethos clients expect.

Today, Portage is the fastest-growing bank in Washington state—driven in part by out-of-state deposits enabled through the Avalo and Braid ecosystem. It’s a clear example of how thoughtful, incremental modernization can support growth while maintaining regulatory integrity and staying true to community values.

The Community Advantage: Strengthening What Makes You Different

Community banks, regional institutions, and credit unions succeed because of deep relationships and personalized service. These values create trust—and must be preserved during modernization.

The right technology makes banks more responsive, secure, and better positioned to serve evolving needs. It doesn’t replace people—it empowers them.

The Avalo + Braid Approach: Modernization with Control

Avalo Labs and Braid Technologies help banks evolve on their terms:

• Seamless Integration: Our solution works with your infrastructure. No rip-and-replace—just a smarter, faster layer bringing real-time payments, scalable compliance, and agile innovation.

• Compliance Reimagined: We automate what slows banks down. Embedded KYCC and dynamic AML intelligence make compliance a competitive advantage—not a burden.

• Future-Ready Infrastructure: Direct Fed clearing, ISO 20022 compatibility, and scalable cross-border features ensure you’re ready for today—and tomorrow.

• True Partnership: No ticket queues or generic support. Avalo and Braid embed alongside your teams, providing high-touch, responsive service and strategic collaboration.

• Built for What’s Next: From embedded payments and integrated compliance to fintech partnerships and third-party payment programs, Avalo-Braid lets you confidently enter new markets—without compromising your systems, customer experience, or charter.

A Future You Control

Modernization isn’t just about today—it’s about positioning your institution to thrive tomorrow. With global payments projected to exceed $290 trillion by 2030, proactive institutions stand to capture enormous growth opportunities—from digital-first businesses and consumer payments to fintech and cross-border banking partnerships.

The good news? You don’t need to dismantle your existing systems to seize these opportunities.

By leveraging smart integrations, embedded compliance intelligence, and strategic partnerships that complement—not replace—your core, you can confidently step into your digital future.

Let’s modernize without compromise—protecting your charter, enhancing your control, and securing your institution’s future.

Let’s grow—together.

Ready to Learn More?

If you're exploring ways to modernize payments, streamline compliance, or support fintech and cross-border opportunities—without disrupting your core—we’d love to connect.

Visit us at the NEACH Payments Conference (May 19–20 in Foxwoods) or reach out directly:

• Stephen Coburn – sales@avalolabs.com

• Randy San Nicolas –sales@braidfi.com

Be the bank your customers trust today—and the one they’ll choose tomorrow.