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Software for Financial Institutions

Reliable software is the foundation of modern EMIs, PSPs, banks, and fintech companies. The quality of a company’s technology infrastructure directly impacts both operational efficiency and regulatory compliance.

Since 2016, COREDO has been helping financial institutions implement and develop software solutions, supporting projects from platform selection to integration, deployment, and compliance with PSD2, DORA, and other regulatory requirements.

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What Financial Software Is and Who Uses It

Financial software is the technology infrastructure of an EMI, PSP, bank or fintech company: a core processing engine, an AML/KYC module, an Open Banking API, a risk management and reporting module and cybersecurity infrastructure. Its quality directly impacts both operational efficiency and regulatory compliance. Financial software is in demand across a wide range of market participants:

Electronic money institutions (EMI) require comprehensive payment platforms supporting e-money issuance, client balance management, SEPA transfer processing and integration with card processors. The software infrastructure of an EMI must comply with the requirements of Directive EMD2 (2009/110/EC) and EBA guidelines.

Payment institutions (PSP/PI) require specialised systems for payment routing, merchant account management, refund processing and fulfilment of strong customer authentication (SCA) requirements under PSD2.

Fintech start-ups at the licensing stage often need rapid onboarding to existing payment platforms through agency agreements or white-label solutions, ensuring regulatory compliance with minimal implementation timelines.

Neobanks and digital banks use modular architectures (BaaS, Banking-as-a-Service) that allow flexible scaling of functionality as the client base grows.

Crypto-asset service providers (CASP) under Regulation MiCA (2023/1114/EU) are required to maintain technological infrastructure for client asset management, risk control and AML compliance.

Global fintech and non-EU financial institutions. Payment companies outside the EU require software supporting multi-jurisdictional compliance: Open Banking API and FCA compliance (UK), MAS-compliant infrastructure (Singapore), VARA-compliant software (UAE/Dubai), FINTRAC AML/KYC standards (Canada).

Key Characteristics: Integration and AML Standards

Regarding integration standards, systems must support ISO 20022 for payment messaging, Open Banking protocols (Berlin Group NextGenPSD2 or equivalent) for interaction with third parties, and ensure compatibility with SEPA, SWIFT and local payment system infrastructure.

AML software requirements include documented risk-scoring methodologies, the ability to automatically generate suspicious activity reports, and integration with up-to-date EU, OFAC and UN sanctions list databases.

How Financial Software Works

The software infrastructure of a financial institution consists of several interconnected layers.

The core processing engine (Core Banking / Payment Processing Engine)

handles transaction processing in real time. An event-driven architecture enables automatic initiation of transactions, reconciliations and reports based on defined events. Compliance with the EU Instant Payments Regulation requires SEPA transfers to be processed within 10 seconds, with a Verification of Payee (VoP) function.

The AML/KYC module

performs client identification and verification (eKYC), continuous transaction monitoring, screening against sanctions lists and politically exposed persons (PEP) registers, and generation of suspicious activity reports (SAR). The system’s functionality must support a three-tier model: simplified due diligence (SDD), standard customer due diligence (CDD) and enhanced due diligence (EDD) — in accordance with the risk-based approach of the 5th Anti-Money Laundering Directive (5AMLD).

Open Banking API

implements the PSD2 requirements for granting third-party providers (TPP) access to client accounts. Technical standards include REST architecture, OAuth2 authentication, JSON data format and eIDAS certificates for participant identification. The key industry specifications are the Berlin Group NextGenPSD2 standards.

The risk management and reporting module

provides regulatory reporting to supervisory authorities, limit management and operational risk monitoring.

Cybersecurity infrastructure

includes data encryption, incident management, penetration testing and operational resilience measures in accordance with DORA.

Requirements for Financial Institution Software

Software in use must meet a number of mandatory technical and regulatory requirements.

In terms of operational resilience (DORA), financial institutions are required to develop and formally document an ICT strategy aligned with the organisation’s business objectives, ensure continuity of critical systems (Business Continuity Plan) and maintain a Disaster Recovery Plan. DORA requirements extend to all contractual relationships with ICT service providers.

With regard to ICT risk management under the EBA Guidelines, institutions must implement procedures for identifying, assessing and monitoring information technology risks, establish clear roles and responsibilities in ICT governance, and ensure regular penetration testing and incident resilience testing.

Switzerland — FINMA: Switzerland operates outside the EU regulatory framework but under strict FINMA supervision. Key requirements: Circular 2018/3 (outsourcing and third-party providers), Circular 2023/1 (operational risks and resilience), FADP/nDSG 2023 (data protection comparable to GDPR), FMIA (trading systems and market infrastructure). There is no direct equivalent of DORA, but FINMA’s operational resilience requirements achieve similar objectives. COREDO advises on Swiss compliance and multi-jurisdictional software integration.

Pricing

The cost of software solutions for financial institutions is calculated individually and depends on the scope of services, system configuration and the specifics of the client’s business model. COREDO offers both selection of ready-made payment platforms and AML systems, and advisory support for custom software development. Contact COREDO for a quote tailored to your requirements.

Implementation Process

COREDO provides expert support at every stage of a financial institution’s technological development — from an initial audit of existing infrastructure to full implementation advisory.

Technology audit and gap analysis.

COREDO assesses the current state of the client’s software infrastructure against the requirements of PSD2, DORA, EBA and applicable national regulations. The audit results in a detailed gap report and a concrete remediation plan.

01

Selection of the solution.

COREDO specialists help select the optimal payment platform, AML system or processing engine from a list of vetted providers compliant with EU regulatory requirements and, where applicable, multi-jurisdictional certifications covering UK FCA, Singapore MAS, UAE VARA, and Canada FINTRAC standards. Fintech companies can instead connect to white-label payment platforms and BaaS providers, and clients with unique business requirements can opt for bespoke software.

02

Contracts and integration.

Support covers vendor negotiations, legal review of contracts and technical integration advisory. For white-label and BaaS onboarding, COREDO ensures proper legal structuring of relationships in accordance with PSD2 and applicable national legislation. For bespoke software, COREDO advises throughout development — from technical specification and architecture selection to acceptance testing and regulatory compliance verification of the finished product.

03

Regulatory ICT advisory.

COREDO advises on DORA requirements, assists in preparing the required documentation (ICT Risk Management Framework, Business Continuity Plan, ICT vendor contracts), and prepares responses to regulatory enquiries on matters of technological resilience.

04

Connecting to a ready-made payment platform via API typically takes between 4 and 12 weeks, including legal documentation, technical integration and testing.

Our Experts

Alena Mach

Executive Director

Nikita Veremeev

Founder & NED

Pavel Kos

Head of Legal Pavel has been supporting COREDO clients on regulatory compliance matters since 2017. He specialises in licensing of payment institutions and EMI, structuring contractual relationships with ICT providers, and fulfilment of PSD2 and DORA requirements.

Gregory Lutsenko

Head of Compliance

Frequently Asked Questions

What software is mandatory for an EMI in the EU?

EMI in the EU are required to have an AML/KYC monitoring system with a documented risk assessment methodology, a payment platform supporting SEPA and SCA mechanisms under PSD2, and ICT infrastructure compliant with DORA and the EBA Guidelines on ICT risk management. The specific set of systems depends on the jurisdiction and licence type. For non-EU jurisdictions, requirements vary significantly: UK payment institutions require Open Banking API compatibility, Singapore EMI require MAS-regulated transaction monitoring, UAE crypto platforms require VARA compliance, and Canadian PSP require FINTRAC-aligned AML systems.

What is DORA and how does it affect software selection?

DORA (Regulation EU 2022/2554) is the EU Regulation on digital operational resilience for the financial sector. Since January 2025, all supervised financial institutions are required to ensure their ICT systems comply with DORA: documenting ICT risks, testing system resilience, managing ICT provider risks, and notifying the regulator of incidents. This affects vendor contract requirements and the architecture of the software infrastructure.

Can a white-label platform be used instead of in-house development?

Yes. Most fintech start-ups and early-stage EMI use white-label platforms or BaaS solutions in the initial phase. This allows faster time to market and reduces capital expenditure. It is important to ensure that the chosen platform meets regulatory requirements and that the vendor contract complies with DORA requirements on third-party risk management.

How long does it take to connect to a payment platform?

Timelines depend on the chosen provider and integration configuration. Connecting to a ready-made payment platform via API typically takes between 4 and 12 weeks, including legal documentation, technical integration and testing. COREDO helps optimise this process through experience working with vetted providers.

Is a licence required to use a third-party AML system?

No, a separate licence for using AML software is not required. However, regulators (in particular, the EBA and national supervisory authorities) assess whether the system used meets the established requirements and whether the organisation can explain and defend the results of its work. Responsibility for the quality of AML monitoring remains with the financial institution, not the software provider.

Does COREDO assist with technical documentation for the regulator?

Yes. COREDO prepares a regulatory ICT documentation package, including a description of the ICT Risk Management Framework, incident management policy, Business Continuity Plan and ICT vendor risk management documentation — in accordance with DORA requirements and applicable national regulations.

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Get a consultation on software solutions for your financial institution. Since 2016, COREDO specialists have been helping EMI, PSP and fintech companies select, implement and document technological infrastructure in compliance with EU requirements.

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