What Central Banks Expect from Technology Partners: Balancing Sovereignty, Security & Innovation

Collaborating with central banks is a unique experience in the financial business. It goes beyond supplying technology platforms; it also includes protecting national confidence, ensuring monetary stability, and assisting in the safe operation of entire economies.

At Coforge, our global engagements with central banks and financial regulators have given us deep insights into how these institutions think, operate, and evolve. Their expectations from technology partners are precise, multi-dimensional, and grounded in long-term national interest.

This blog reflects our comprehensive perspective on how technology providers must align with the unique mission of central banks.

Safeguarding National Security: Security and Operational Resilience

Central banks are at the heart of financial ecosystems. Any disruption in their systems can lead to significant market disturbances, undermine public confidence, and have policy implications.

Technology partners must deliver:

• Zero-trust security architectures embedded at every layer of the system
• Real-time monitoring and anomaly detection across all infrastructure
• Hardened disaster recovery and business continuity frameworks
• Nation-grade cyber defense protocols aligned with sovereign risk postures

Security is not an afterthought but foundational to all digital transformation initiatives central banks undertake.

Sovereignty Over Data and Digital Assets

Data is not simply information for central banks; it is a sovereign financial asset. Control over processing, storing, transmitting, and accessing data is non-negotiable.

Key expectations include:

• Data residency aligned to national jurisdictions
• Strict access controls and transparent audit trails
• End-to-end encryption for both data in motion and at rest
• Full compliance with national data protection regulations and international obligations

Technology providers must enable data governance models that combine technical controls and legal assurance frameworks.

Legacy Modernization Without Disruption

Many central banks operate critical functions (monetary policy systems, payment platforms, treasury management, etc.) on legacy systems that cannot risk sudden change.

Successful modernization must be:

• Incremental and domain-sensitive
• Leveraging re-platforming, co-existence models, and API-layer extensions
• Allowing staged adoption of cloud-native or composable banking architectures
• Protecting operational continuity throughout the transformation journey

Modernization must create agility without destabilizing core national financial operations.

Real-world examples illustrate how this balance between modernization and continuity is achieved:

The Swiss National Bank, for instance, upgraded its Swiss Interbank Clearing (SIC) system to ISO 20022 standards through a phased rollout completed in 2018. The transformation was domain-sensitive, maintaining uninterrupted clearing operations while gradually migrating all participating banks, handling over 2 million transactions daily, to the modern standard.

Similarly, the Reserve Bank of Australia introduced a secure, modular API gateway using MuleSoft technology. Instead of overhauling core platforms, it layered cloud-native services onto existing infrastructure, enabling real-time information exchange across agencies without disrupting mission-critical systems.

Modernization must therefore create agility without destabilizing core national financial operations.

Cloud Adoption with Guardrails

While cloud is being adopted, central banks demand maximum control over cloud deployments.

Cloud expectations include:

• Use of sovereign or hybrid cloud models with transparent data boundaries
• Full exit strategies and portability frameworks (avoiding vendor lock-in)
• Strong encryption, key management, and policy-driven access frameworks
• Integration with on-prem systems through secure API gateways and service mesh designs

However, cloud adoption is not without risk. Key concerns include:

• Jurisdictional exposure: In hybrid or sovereign setups, reliance on hyperscaler infrastructure may expose the central bank to foreign legal or surveillance risks.
• Loss of operational visibility: Cloud-native services may obscure audit trails or delay incident detection without well-defined observability controls.
• Vendor lock-in and migration risk: Despite exit strategies, dependencies on proprietary services (e.g., database engines, identity frameworks) can complicate portability or create high switching costs.
• Integration vulnerabilities: Connecting cloud and on-prem assets through APIs and service meshes opens potential attack vectors, especially if not managed through zero-trust principles and continuous validation.

Cloud platforms must deliver scalability and efficiency while preserving regulatory oversight and risk assurance at every layer, from infrastructure to application. Technology partners must proactively address these risks through transparent architecture blueprints, shared responsibility models, and continuous compliance monitoring.

Responsible Adoption of AI and Analytics

Central banks are actively exploring advanced analytics, machine learning, and AI to strengthen:

• Market surveillance
• Regulatory reporting
• Financial stability assessments
• Supervisory technology (SupTech)
• Macro-economic forecasting

However, their adoption of AI remains firmly grounded in:

• Explainability of models
• Bias mitigation and fairness assurance
• Full auditability of AI-driven decisions
• Alignment with policy neutrality and national financial stability objectives

Technology partners must bring domain-aware, ethically governed AI frameworks built for regulators, not for commercial bias.

Seamless but Controlled Interoperability

Central banks operate within complex ecosystems, interfacing with:

• Ministries of Finance
• Financial regulators and supervisors
• Payment infrastructures (RTGS, clearing houses, SWIFT, BIS platforms)
• Financial institutions and cross-border settlements

Technology partners must:

• Enable controlled API-led interoperability while maintaining national security standards
• Design modular but policy-compliant integration frameworks
• Facilitate cross-border cooperation under regulated data sharing agreements
• Build architecture that allows ecosystem collaboration without exposing sovereign systems

Interoperability must serve the policy goals without introducing uncontrolled data or system risk.

Alignment to Public Sector Mandates and Ethical Standards

Unlike commercial banks, central banks require:

• Deep experience in public sector governance models
• Familiarity with regulatory mandates and statutory compliance
• Adherence to strict ethical standards, including:
  • Avoidance of conflicts of interest
  • Clear personnel vetting and background checks
  • Full transparency in delivery operations

Trust is built not only on technology but on the institutional integrity of the partner.

End-to-End Delivery Capability Across Complex Landscapes

Technology partners are expected to provide comprehensive delivery coverage, including:

• Architecture consulting and platform design
• Complex program management for national-scale transformations
• Integration with multiple internal and external stakeholders
• Domain-specific regulatory advisory
• Business process reengineering aligned with monetary operations
• Scalable managed services and assurance frameworks

Central banks expect partners who can not only design but also operationalize change.

In Summary: What Central Banks Expect

Closing Thoughts

As custodians of monetary and financial stability, central banks must ensure their technology landscapes evolve without compromising national policy mandates. This demands a purposeful balance of sovereignty, security, governance, and responsible innovation.

Their technology partners must operate at this intersection, not merely delivering transformation but in a way that safeguards national interests and institutional trust.

At Coforge, we are committed to supporting central banks with purpose-built, policy-aligned, and ethically governed technology solutions that serve both national objectives and future-ready resilience.

Several leading central banks have already demonstrated how this balance can be achieved:

• The Bank of Canada adopted a cloud-first strategy, leveraging Microsoft Azure to create a data lake architecture that supports rapid structured and unstructured data ingestion. This enabled faster economic modelling, improved agility in publishing insights, and enhanced public data services, while maintaining strict operational governance.
  (Source: Microsoft Customer Story)
• The European Central Bank (ECB) has established a cloud-enabled SupTech Virtual Lab as part of its broader digitalization blueprint. This lab supports cross-border supervisory collaboration, secure model experimentation, and data analytics innovation, all within a controlled cloud environment.
  (Source: ECB Speech by Elizabeth McCaul, FSB SupTech Report)

These examples highlight that secure, cloud-based transformation is possible with the right policy guardrails, hybrid models, and strong governance.

At Coforge, we enable such journeys, partnering with central banks to deliver future-proof, regulatory-aligned, and sovereign-conscious transformation.

Need help? Connect with our Banking experts to learn more about what central banks expect from technology partners.