Slovakia’s second-largest bank is upgrading a 30-year-old mainframe system — live, in production, without stopping the business. In an industry obsessed with rip-and-replace, VUB’s philosophy of evolution over revolution is turning heads.
Article based on a presentation done at the European Digital Finance Conference · 5 March 2026
There is a moment in every core banking conversation when someone in the room mentions the word ‘replacement’. Consultants lean forward. Vendors smile. Risk officers reach for their antacids. For most banks, the word carries the weight of a multi-year, nine-figure transformation programme — the kind that ends careers, strains balance sheets, and occasionally brings down institutions.
VUB Bank, the second-largest bank in Slovakia and a subsidiary of Italy’s Intesa Sanpaolo group, has a different word for it: evolution.
Speaking at a lecture on core banking modernization, Vladimira Tomasek, head of core banking at VUB, and Juraj Lachkovic, the department’s IT architect, laid out with unusual candor how the bank has spent years upgrading its mainframe-based Hogan system — not by replacing it, but by treating it as a living organism capable of adaptation. The approach is unglamorous, technically demanding, and increasingly rare in an industry seduced by the promise of cloud-native, composable banking platforms.
But it is working. And for technology leaders across European retail banking, VUB’s story deserves serious attention.
THE ASSET NOBODY WANTS TO ADMIT THEY HAVE
Hogan is not a system that generates conference keynotes. The platform, now maintained and developed by DXC Technology, has been the operational backbone of VUB for three decades. It runs on an IBM mainframe. It carries customer deposits, lending books, and payments for retail clients, corporates, municipalities, and even the Slovak State Treasury — which connects directly to VUB’s infrastructure and effectively operates as a bank-within-a-bank.
It is, by any conventional technology measure, a legacy system. And yet, Tomasek was emphatic: ‘This has never been our limitation.’
That claim — that a 30-year-old mainframe system is ‘modern’ — will strike some readers as cognitive dissonance. In the current industry discourse, ‘legacy’ and ‘modern’ are treated as antonyms. But VUB’s architects make a more nuanced argument: modernity is not a birthdate, it is a design principle. Hogan was built with modularity and integration in mind from the outset, they contend, at a time when many of today’s celebrated cloud-native challengers were yet to be conceived.
‘I never heard anyone tell me Hogan cannot be integrated,’ Tomasek said. ‘We are, and we have always been.’
THE UPGRADE THAT SHOULD NOT HAVE BEEN POSSIBLE
The centrepiece of VUB’s current modernization programme is an upgrade of the Hogan application itself — the first in three decades. To appreciate the significance of this, consider the context: the system has been continuously customized over 30 years to meet the specific needs of a bank that inherited a complex product legacy from Slovakia’s pre-1989 state banking era. Customization, in mainframe banking, typically makes upgrades structurally impossible. The changes run so deep that no clean upgrade path exists.
VUB, in cooperation with DXC, found a way around this. The bank first upgraded the ‘umbrella’ layer — the technical middleware that mediates between the Hogan application and the IBM operating system. That has been completed. The application upgrade itself, covering accounts, term deposits, statements, and loans, is now underway, with a target completion date of this year.
The critical distinction, emphasized repeatedly by both presenters, is continuity. ‘This upgrade does not stop us from doing business requirements, doing development, doing regulatory work,’ Tomasek said. In a region subject to relentless EU regulatory change — particularly in payments — the ability to keep the lights on during transformation is not a nice-to-have. It is existential.
The payments observation is particularly pointed. European payment infrastructure is in a state of almost continuous reform — SEPA Instant Credit Transfer, ISO 20022 migration, PSD3, digital euro pilots. VUB’s payment processing now runs partly outside Hogan, in an in-house developed module built to cooperate with the core system. Tomasek described the pace of change with barely concealed exasperation: ‘I call payments not payments, but messages — because messages have ten seconds to be applied everywhere.’ VUB is managing this from a mainframe. Successfully.
THE ARCHITECTURE OF RESTRAINT
Lachkovic´s contribution to the lecture was to articulate the strategic framework that makes this approach coherent rather than merely conservative. His central thesis is that banks — not consultants, not vendors — are the best-positioned organizations to determine their own modernization path.
‘Usually what is overlooked are not the typical things like cost, time, and resources,’ he said. ‘It is more than that.’ After major transformation projects, he argued, banks face cascading secondary costs: process changes, long-term maintenance, and — critically — opportunity cost. When a bank commits to a multi-year replacement programme, the business must pause its forward agenda. New product development stalls. Regulatory projects are deprioritised. The opportunity cost of not innovating, he suggested, is rarely modelled accurately in the feasibility studies that external consultants present.
His architectural philosophy is captured in a phrase that will resonate with anyone who has survived a failed core banking project: ‘gradual changes, modular changes, and when something needs to be decoupled from the core, do it step by step rather than changing the whole system.’
VUB’s decoupling strategy is already producing results. Payments have been moved to a dedicated in-house module. Wealth management services are operated separately. Statement processing is being planned for migration. Each component is extracted incrementally, tested thoroughly, and integrated via APIs — leaving the Hogan core stable and uninterrupted.
Lachkovic offered a biological metaphor that the audience appeared to find both amusing and apt. ‘If we take the core banking system as a kind of dinosaur, and the new challenges as an asteroid targeting them — where are the dinosaurs now? They are birds. Birds are everywhere. We hope that by evolutionary changes we will simply change our system to something new, which is still usable in the current world.’
THE COUNTERARGUMENT: WHAT VUB CANNOT CLAIM
It would be a disservice to readers to present VUB’s story without acknowledging its limitations as a universal template. Tomasek herself was candid on this point: ‘I know that this approach is not usual or possible in all core banking systems. Some of them, for example, cannot be upgraded at all.’
VUB’s position is structurally fortunate. DXC continues to invest in Hogan development, meaning that the product is not merely kept alive by VUB’s own engineers but evolves at the vendor level. Banks running systems on platforms where the vendor has effectively abandoned development — or where the original code is so undocumented that no living engineer fully understands it — face a categorically different problem.
The bank also benefits from deep in-house expertise, built over decades. Tomasek and Lachkovic both emphasised that VUB’s ability to customize, upgrade, and extend Hogan depends entirely on having engineers who understand the system at a profound level. That kind of institutional knowledge does not transfer easily to new platforms — and building it takes years.
There is also a question of scale and ambition. VUB is a significant institution, but it is not a top-tier global bank with the complexity of a HSBC or BNP Paribas. The decoupling strategy that works for a Slovak retail bank may not scale to an institution running thousands of products across dozens of jurisdictions.
THE AI QUESTION IN THE ROOM
Near the close of the presentation, Tomasek made a remark that drew knowing smiles from the audience. Asked about the future, she addressed the growing conversation around AI-assisted development and agentic systems: ‘If someone tells me that AI will replace my developers — I will be so happy, if it will be possible on the core bank without the disruption of the bank.’ She paused. ‘We are not against it. We are waiting — from IBM, from someone else, from Anthropic, yes — but in this moment, this is our way.’
It was a pragmatic answer from a pragmatic banker. The AI-native core banking platform remains, for now, a promise rather than a product. Until it can be proven to operate on production banking infrastructure without introducing systemic risk, institutions like VUB will continue to trust systems they understand over systems they admire.
LESSONS FOR THE INDUSTRY
The broader lesson of VUB’s experience is not that mainframe modernization is preferable to cloud migration. It is that the decision is more complex than the vendor landscape would have banks believe, and that the costs of transformation extend well beyond what appears in an RFP or a consultant’s slide deck.
During the Q&A session, an audience member raised a point that cuts to the heart of the challenge: how does VUB ensure that its modernization keeps pace with evolving business processes, not just technology infrastructure? The answer was telling. ‘We never stop development,’ Tomasek replied. ‘We are doing the upgrade and modernization while we are always doing development. If the changes come up, we include them in the upgrade. It is hand-in-hand. You can’t divide it.’
VUB Bank is headquartered in Bratislava, Slovakia, and operates as a subsidiary of Intesa Sanpaolo Group. Its core banking system, Hogan, is developed and maintained in partnership with DXC Technology.
