The modern banking sector is navigating a landscape shaped by two powerful and opposing forces: the rising sophistication of cyber threats, often powered by artificial intelligence, and a parallel surge in complex regulatory requirements. Financial institutions find themselves defending against intelligent, automated attacks while simultaneously managing an ever-growing compliance burden. This high-stakes environment is compelling a strategic shift away from treating technology as a support function and toward a new model where an AI-first methodology is central to security, operations, and growth.
This emerging strategy, championed by technology partners like Hexaware, reimagines how banks operate by embedding intelligent systems at their core. The approach is built on a foundation of “AI-led, human intelligence-perfected” solutions that address the industry’s most pressing challenges. By combining advanced automation platforms with security frameworks that analyze user behavior, this model delivers substantial gains in efficiency and resilience. It offers a compelling alternative to traditional large-scale providers, particularly for mid-market banks seeking to maximize value and secure a competitive edge in a demanding marketplace.
A New Paradigm for Cybersecurity
As malicious actors increasingly leverage AI to orchestrate attacks, traditional security measures like passwords and firewalls are proving insufficient. The new generation of threats involves hacking into networks and impersonating both people and transactions with a level of sophistication that requires a more dynamic defense. In response, the security focus is shifting from static credentials to dynamic user behavior.
Beyond Traditional Defenses
The core vulnerability of older systems is their reliance on verifiable information, such as a password or a security key, which can be stolen or compromised. Modern fraud, however, can often bypass these checks. Behavioral biometrics offers a more robust solution by creating a continuous layer of security that works passively in the background. This technology analyzes how a user interacts with a device, including their typing rhythm, mouse movements, swipe gestures, and even the angle at which they hold their phone. These dynamic actions form a unique digital signature that is far more difficult for a fraudster to replicate than simply stealing a password.
The Trust Framework in Action
Hexaware has operationalized this concept through its Trust Framework, a system designed to combat these advanced threats by monitoring behavioral patterns. The framework establishes a personalized baseline for each user, learning their typical habits and routines. According to Ravishankar Subramanian, an Executive Vice President at the company, the system flags activity that deviates from these established norms. He provides an example: “If someone logs in and has the habit of checking their balance first every day and then go and do other transactions, but on a particular day they log in and skip the balance, choosing instead to do something else, that’s a flag.” This approach provides ongoing authentication throughout a session, meaning that even if an attacker gains access to an account, their unusual behavior can trigger an alert and prevent fraudulent activity before it occurs.
Automating for Resilience and Efficiency
The need for banking operations to run continuously, 24 hours a day, requires a level of monitoring that is impractical and inefficient for human teams alone. The sheer volume of processes, from transaction approvals to system health checks, necessitates a sophisticated automation strategy to ensure resilience and prevent costly downtime.
The Tensai Platform
To meet this need, Hexaware developed its Tensai framework, a digital-first platform built to manage and monitor banking systems around the clock. Instead of relying on human intervention for routine tasks, Tensai employs a “systems watching other systems” methodology. The platform is comprised of six distinct modules—covering agility, efficiency, experience, assurance, generative AI, and operations—that provide a comprehensive toolkit for IT automation. A key advantage is its ability to overlay onto a bank’s existing legacy systems through APIs and customizable adapters, avoiding the risk and expense of a complete “rip-and-replace” overhaul. When an issue is detected, an alert triggers a tiered escalation model. Depending on the severity and classification of the alert, the response can be a fully automated action, intervention by an AI agent, or an alert routed to a human specialist in the loop.
Harnessing Generative AI
Further enhancing its capabilities, the platform incorporates Tensai GPT, a web application developed in collaboration with Microsoft and its Azure OpenAI Service. This tool functions as a secure, powerful internal knowledge base, allowing employees to access operational guidance and insights through an advanced conversational interface. The GenAI module automates the capture and refinement of information, making it rapidly searchable and scaling easily as IT environments grow. This ensures that knowledge is shared effectively across the organization, reducing support overhead and speeding up decision-making.
Reinventing Regulatory Compliance
Since the 2008 financial crisis, the volume of banking regulations has increased by over 500%, creating a significant operational and financial burden. Global banks often spend hundreds of millions of dollars annually on compliance, with the cost for larger institutions reaching an estimated $10,000 per employee. Manual compliance processes are not only slow but also prone to human error, which can result in substantial fines for non-compliance.
Transforming Reporting with AI
Artificial intelligence is proving to be a transformative force in this area by automating the most labor-intensive aspects of compliance. AI-powered systems can analyze vast quantities of data and documents to ensure they align with complex rules like the Home Mortgage Disclosure Act (HMDA) or the Truth in Lending Act (TILA). By leveraging generative and agentic AI, Hexaware has achieved efficiency gains of nearly 500% in regulatory reporting processes. Workflow automation has completely transformed traditional processes, with Subramanian noting that tasks “what used to take people around eight to 10 working days is now getting done in less than an hour.” This automation not only accelerates reporting but also improves accuracy, freeing compliance officers to focus on more strategic risk management activities.
De-risking Core Banking Transformation
Upgrading a bank’s core systems is one of the most critical and riskiest undertakings in the industry. These foundational platforms, some of which were built in the 1970s and 1980s, are deeply intertwined with every aspect of a bank’s operations. Research shows that a high percentage of these transformation projects face significant delays or fail to meet their objectives due to a range of complex challenges.
The Challenge of Modernization
Successfully modernizing a core banking system requires navigating several major hurdles. Data migration is a primary concern, as vast amounts of sensitive customer data must be moved from the old system to the new one without loss or corruption. Integrating the new core with dozens or even hundreds of other existing applications via APIs is another significant challenge. Furthermore, these projects demand specialized skills and talent that many banks lack internally. The combination of these factors makes core transformation a high-stakes endeavor where failure can lead to operational disruptions and significant financial loss.
Assuring Quality and Integrity
To address these risks, Hexaware has developed a market-leading autonomous testing and quality assurance platform. Sandip Ganguly, a Vice President and Country Head, explains that the platform is built on three pillars to ensure a successful transformation. First, it validates functional alignment, ensuring the new system delivers on the specified business requirements. Second, it performs rigorous API integration testing, guaranteeing that the new core can communicate seamlessly with all other systems in the bank’s ecosystem. Finally, it validates data migration integrity to confirm that all data is transferred accurately and securely. This comprehensive assurance framework provides the confidence and risk mitigation needed to facilitate a smooth and successful delivery of core banking services.
A Strategic Approach to Partnership
Hexaware’s go-to-market strategy is tailored to the needs of the mid-market segment, where organizations often seek maximum value from more restricted budgets. Rather than engaging in lengthy and abstract sales cycles, the company focuses on demonstrating tangible results from the outset. Ganguly explains this approach, stating, “More often than not, we are happy to invest and establish value, and on the back of that we get a seat at the table.”
This willingness to prove its capabilities upfront helps build trust and establishes a foundation for a long-term relationship. By positioning itself as a full-service provider, Hexaware aims to become a deeply integrated partner in its clients’ transformation journeys. This strategic focus, combined with its powerful AI-led solutions, presents a compelling proposition for financial institutions navigating the complexities of the modern digital landscape.
