Core systems that don't hold you hostage
Financial Services — Banking
What the compliance landscape actually demands.
Banking technology regulation in the United States is enforced by four federal regulators — OCC, FDIC, Federal Reserve, and NCUA for credit unions — with overlapping examination authority and increasingly convergent technology standards. The FFIEC IT Examination Handbook defines the minimum technology risk management expectations for federally regulated institutions. The Federal Reserve's SR 11-7 on Model Risk Management creates specific requirements for institutions using quantitative models in credit decisions, capital calculations, and AML systems. Basel III capital requirements mandate that large institutions maintain technology infrastructure sufficient to calculate and report regulatory capital ratios under stress scenarios — which requires data infrastructure that many institutions' current systems cannot support without manual intervention. DORA, effective January 2025 for EU-connected institutions, imposes operational resilience requirements including ICT risk management frameworks, resilience testing obligations including threat-led penetration testing, and ICT incident reporting timelines of 4 hours for initial notification and 72 hours for detailed report. The CFPB's Section 1033 rulemaking, finalized in 2024, requires banks to provide consumer-permissioned data access through standardized APIs — with the FDX API standard emerging as the technical implementation. Banks that have not built API infrastructure face a compliance timeline that requires significant engineering investment.
The US core banking market is controlled by three vendors from the 1980s — and every regional bank that builds on their platforms inherits four decades of technical debt and a compliance posture designed for a different regulatory era.
The Big Three core banking vendors — FIS, Fiserv, Jack Henry — are so universally disliked that banking trade associations are funding alternatives. Long-term contracts, outdated technology, closed systems, and prices that make modernization feel impossible. The industry is ready for engineering teams that build open, compliant alternatives.
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The US core banking market is effectively controlled by FIS, Fiserv, and Jack Henry — three platforms built in the 1980s and maintained through four decades of patches, extensions, and workarounds. The ABA and ICBA have been publicly funding research into open banking alternatives since 2018. Every regional bank that wants to add a modern capability — real-time payments through RTP or FedNow, embedded banking APIs, open banking data sharing — must build an integration layer over its legacy core. These integration layers accumulate complexity with every new capability. Eventually the integration layer becomes as complex as the core it was meant to simplify, and the bank is maintaining two sets of technical debt instead of one. CCAR stress testing creates a specific data infrastructure problem: institutions subject to the Federal Reserve's stress testing requirements must demonstrate that their capital calculation data flows are accurate, complete, and reproducible under examination. Most regional banks cannot produce that evidence without manual reconciliation processes that the Fed's examiners have flagged as control weaknesses. FinCEN's BSA/AML enforcement actions in recent years have targeted institutions whose transaction monitoring systems were tuned to reduce alert volume without maintaining detection accuracy — a tradeoff that reduces BSA officer workload but creates regulatory exposure when the tuning decisions are examined.
How We Approach Banking
The Algorithm approaches banking technology engagements with open architecture as the design principle and compliance as the engineering constraint. Core banking modernization follows a migration approach that maintains continuity of operations — new capabilities are built on modern, cloud-native infrastructure that runs alongside the existing core, with transaction types migrated progressively as each is validated. API-first design means that every banking capability is accessible through documented, standardized interfaces — satisfying Section 1033 open banking requirements without a separate compliance build. BSA/AML systems are designed with detection accuracy as the primary tuning objective, not alert volume reduction — because FinCEN's examination focus has shifted from whether institutions have transaction monitoring to whether their monitoring actually detects suspicious activity. Model risk management documentation is produced as part of the build for any system that meets SR 11-7's definition of a model — including AI-assisted underwriting, fraud detection, and AML systems. DORA operational resilience requirements — ICT risk management framework, resilience testing, incident reporting — are addressed as part of the infrastructure design for EU-connected operations.
What Success Looks Like
A successful engagement delivers a modern banking capability on open architecture that satisfies BSA/AML and GLBA requirements natively, integrates with the existing core through documented API interfaces, and does not require a dedicated integration development team to maintain. Section 1033 data sharing APIs are compliant with FDX standards and produce evidence sufficient for CFPB examination. Transaction monitoring detects what the BSA Officer needs to detect without the false positive volume that overwhelms operations. Model risk management documentation satisfies SR 11-7 requirements for every quantitative system in the engagement scope. The technology team can deploy new product capabilities without another compliance review cycle. The cost per account comes down because the architecture is not maintaining two generations of technical debt simultaneously.
Duration: 8 - 16 weeks
Output: Production system + audit documentation
A regional bank replacing a Big Three core system typically engages at Tier II — 60 engineers, 6 months, open and compliant.
What We Deploy in Banking
Financial Services — Banking Compliance Assessment
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Engineering Specifics — Financial Services
Audit-trail architecture that captures the named user, the resource accessed, the operation performed, and the workstation identity in a format SOC 2 examiners directly accept — not a log file that requires translation for an external audit.
Access-control logic enforced at the data layer rather than the application layer — every read of a regulated record validates authorization against the live scope of the requesting principal, preventing the cross-scope exposure that has produced multiple OCR and FFIEC findings in Financial Services environments.
Encryption configured to the specific cipher-suite and key-management requirements SOC 2, PCI DSS, GLBA, BSA AML actually mandates, not the closest nominal default. Key rotation, key-access logging, and key-escrow architecture are designed at engagement intake, not after the first audit.
Incident-response architecture that satisfies the strictest notification timeline among SOC 2, PCI DSS, GLBA, BSA AML. Pre-staged runbooks, pre-drafted regulator-facing templates, and automated detection-to-paging pipelines make the published notification deadlines architecturally enforceable rather than procedurally aspirational.
Continuous compliance evidence generation rather than retroactive assembly — every change-control event, access-provisioning event, and configuration update produces structured records aligned to SOC 2 on the day the event happens, queued for the next audit pack with no manual reconstruction.
Quarterly audit pack delivered to your compliance officer without a request — workforce roster, access events, change attribution, incident register, training-currency report, mapped to SOC 2, PCI DSS, GLBA, BSA AML in the format your audit program already uses.
What We Ship — Financial Services
A working production system in your tenancy, SOC 2-compliant from commit one, delivered on the named milestone date — not a discovery document, not a refactor backlog, not a phase-two scope-expansion request.
Compliance baseline documentation aligned to SOC 2, PCI DSS, GLBA, BSA AML for Financial Services — workforce attribution logs, data-flow diagrams, access-control inventory, encryption-key inventory, incident-response runbook — delivered as engagement artifacts, not assembled before the first audit.
IP and source-code transfer effective from day one — your engineering team owns the repository, the deployment pipeline, the infrastructure-as-code; we do not hold operational hostage and the cost model rewards us for delivery, not retention.
Knowledge transfer that survives the engagement — every operational decision documented in runbooks an on-call engineer can follow at 3 AM without paging us. The deliverable is autonomy, not dependency.
ALICE compliance enforcement integrated into your CI pipeline before engagement close — SOC 2, PCI DSS, GLBA, BSA AML anti-patterns are blocked before they merge, so the compliance posture does not drift between audit cycles.
Post-engagement retainer optionally available for the first six months — defined escalation path to the original engagement team for incidents or critical questions. Most clients do not need it, because the system is designed to be operated without us.
Common Findings We Remediate — Financial Services
Audit-trail gaps: log records that exist but cannot be joined back to a named user, a specific resource, and a timestamp from a synchronized source. Reconstructed under examination, the gaps show up as "we cannot determine who did this" — the finding regulators specifically write up under SOC 2, PCI DSS, GLBA, BSA AML.
Authorization-vs-authentication confusion: code paths that verify the requesting principal is logged in but do not verify the principal is authorized for the specific resource. The result is cross-scope data exposure that has produced OCR, FFIEC, and ICO settlements in Financial Services environments at scale.
Encryption configured to a nominal label rather than the specific cipher-suite, key-length, and key-management requirements SOC 2, PCI DSS, GLBA, BSA AML actually mandates. The audit finding is "encryption is implemented but not validated"; the architecture fix is to pin the implementation to a validated cryptographic module from engagement start.
Incident-response runbooks that exist as documents but have never been exercised against the specific notification timelines Financial Services obligations impose. The first real incident is the wrong time to discover the runbook references a tool no one configured or a contact who no longer works at the organization.
Vendor-management and BAA-equivalent gaps: third-party services that receive regulated data without the contractual basis that SOC 2, PCI DSS, GLBA, BSA AML requires. The pattern is usually accidental — a new SaaS integration added during a sprint without compliance review — and produces a finding under every modern regulatory framework.
Compliance evidence assembled retroactively before the audit cycle, then re-assembled before the next one — burning meaningful margin for engagement work that should be generated continuously by the deployment pipeline. The fix is once: instrument the systems to produce audit evidence as a byproduct of normal operations, not on demand.
Why The Algorithm — Financial Services
The Financial Services engineering market is crowded with generalist firms claiming sector competence and sector specialists with limited engineering depth. The combination — deep engineering capability and operational Financial Services compliance fluency — is rare, and that gap is where the most expensive vendor failures happen.
Our teams come through the Algonauts pipeline trained on SOC 2, PCI DSS, GLBA, BSA AML before they touch a client codebase in Financial Services. The training is not optional and not certificate-only — engineers must demonstrate working competence on representative compliance scenarios before they are deployed. This is the reason our Financial Services clients do not see the "compliance was an afterthought" pattern that drives most remediation engagements.
Engagement pricing is fixed. The price you agree at engagement start is the price at delivery. Scope changes that materially expand the engagement are negotiated transparently as change orders; we do not bury scope creep in velocity reports or sprint backlogs. The economic model rewards us for delivering, not for billing — and that alignment is the foundation under everything else above.
Common Procurement Questions — Financial Services
How is this engagement different from staff augmentation?
Staff augmentation places named contractors against an hourly rate card; the client retains accountability for delivery, methodology, and code quality. Our engagements are fixed-price commitments against named milestones; we retain accountability for delivery and ship the system as a deliverable, not the engineers as a resource. The contractual posture, the team composition, and the economic incentives are different.
What happens if the engagement scope changes?
Material scope expansions are negotiated transparently as change orders against the original engagement. We do not bury scope creep in velocity reports or sprint backlogs. Minor clarifications and emergent design decisions are absorbed without change orders — the fixed-price commitment includes a reasonable allowance for in-scope adjustments that any real engineering project requires.
What does post-delivery support look like?
The deliverable is designed to be operated by your team without our continued involvement. Documentation, runbooks, and the ALICE compliance enforcement layer continue to enforce the standards after we leave. Optional retainer support is available for organizations that want a defined escalation path to the engagement team for the first six months; most clients do not need it.
How do you handle data access during the engagement?
Production data access for our engineers is mediated through the same compliance controls that govern your internal engineering team. Named workforce documentation, framework-specific training currency, background checks, and BAA or equivalent agreements are completed before access provisioning. Access events are logged with the engineer's named identity, not a shared service account.
What is the procurement path?
Most engagements begin with a 30-minute scoping conversation, followed by a written engagement proposal within five business days that specifies scope, milestones, fixed price, and named team members. Standard contracting cycles complete within two weeks of proposal acceptance. We are familiar with enterprise procurement gating (vendor onboarding, SOC 2 review, BAA execution, MSA negotiation) and we support these processes without billable consulting overhead.