Digital Euro Readiness Without a Core Banking Rebuild

The digital euro represents a once-in-a-generation shift in how money moves across Europe, with wide-ranging implications for retail payments, wholesale settlement, customer ownership and the economics of banking infrastructure.

For banks, this is not simply another regulatory programme. It is a strategic infrastructure transition that will determine how public money is accessed digitally, how customer relationships are retained and how liquidity and settlement services are monetised.

Early readiness creates clear advantages. Banks can strengthen customer retention through their digital wallet interface, reduce customer outflow to more advanced providers and lower costs across cash and payments infrastructure. Cash-related operating costs could be materially reduced as digital euro adoption scales.

At the same time, more efficient liquidity management becomes possible—enabling the move from batch-based systems to always-on settlement and opening the door to new treasury and liquidity optimisation services.

The digital euro is designed to complement cash, not replace it, providing a trusted form of public money for the digital economy. Banks and PSPs will remain central to distribution, onboarding, wallet servicing and customer experience.

However, readiness requires targeted change across customer and wallet lifecycle management, payments and settlement, liquidity and treasury operations and data and control environments.

The challenge is that these capabilities sit across deeply interconnected banking systems. Payments, deposits, servicing, risk and regulatory controls cannot simply be disconnected while new digital euro capabilities are introduced. Banks therefore need a way to understand those dependencies, introduce new capabilities incrementally and validate that critical business behaviour remains intact.

Sapient Slingshot, our AI platform for automating and accelerating the software development lifecycle, is designed for this kind of modernization work. Slingshot uses AI-assisted analysis to uncover legacy logic and dependencies, translate them into modern specifications and support testing and traceability as new capabilities are introduced.

Becoming digital euro ready does not require a full rebuild of banking architecture. The most effective route is a modular, minimally invasive integration layer that sits on top of existing systems.

This matters for three reasons:

• It limits near-term resource consumption and implementation risk
• It preserves flexibility as regulatory and market dynamics evolve
• It creates an orchestration layer across wallets, payments, liquidity and controls

In practice, this is not wholesale replacement. It is controlled modernization: understanding what is already there, modernizing what needs to change and validating new capabilities before they are scaled.

This approach is already being applied to complex banking modernization challenges. In one program, a leading global retail and commercial bank used Slingshot to modernize a deeply embedded legacy environment.

The bank needed to understand core banking systems spanning more than 300 critical batch feeds, with business logic embedded across nearly three million lines of COBOL. Slingshot analysed the legacy environment, extracted and verified the underlying business rules and converted them into structured specifications and modern designs in eight weeks. The program achieved 95 percent specification accuracy, reduced code-to-specification effort by 70–85 percent and cut analysis time per feed from 35 days to five.

The work was not a digital euro program. But it demonstrates a capability that is directly relevant to digital euro readiness: making complex legacy behaviour visible, preserving critical business rules and creating a controlled path toward modern architecture without starting with a wholesale core replacement.

The digital euro should be viewed as an infrastructure opportunity rather than a standalone product. Readiness creates value for banks in three areas: protecting customer relationships and payments revenue, reducing the cost of cash infrastructure, and creating new liquidity and settlement opportunities.

Protecting customer relationships and payments revenue

The primary risk is not deposit loss alone, but losing the customer relationship. If banks fail to offer a seamless digital euro wallet experience, customers will migrate to alternative providers—as has already happened in digital payments.

Today, wallet providers such as PayPal, Apple Pay and Google Pay already account for around 34 percent of European e-commerce volume. Nearly 72 percent of Europeans use mobile wallets, and the European mobile wallet market is projected to grow from approximately USD 4.6 billion in 2025 to USD 40.1 billion by 2034.

Under the European Central Bank (ECB) model, banks remain well positioned to retain interchange revenue, avoid paying fees to Big Tech wallet providers, and stay at the centre of the customer relationship. However, this depends on delivering a competitive, customer-first wallet experience.

Failure to do so results in revenue shifting to third-party providers, reduced visibility into customer behaviour and weakened ability to cross-sell and monetise future services. This is ultimately about owning the customer interface. Banks that move early can strengthen relationships and unlock new revenue streams; those that delay risk becoming invisible in the digital money ecosystem.

Rebalancing the economics of cash infrastructure

Cash infrastructure remains expensive and is declining in use. ATM operating costs can reach up to €25,000 per machine annually. Germany alone operates around 51,000 ATMs, down from approximately 60,000 in 2015. Total cash handling costs in Germany reach around €10.8 billion annually, or roughly €130 per capita, while global cash logistics costs are estimated at €152 billion.

At an individual bank level, a network of 500 ATMs represents an annual cost of €7.5 million to €12.5 million. Even a 20 percent reduction in footprint could release €1.5 million to €2.5 million per year.

Digital euro readiness enables a gradual transition toward a digital cash-equivalent, allowing banks to reduce ATM networks over time, simplify cash handling operations and lower cost-to-income ratios without compromising access. This positions the digital euro as a structural cost optimisation lever, not just a compliance requirement.

Building new liquidity and settlement value pools

The third value lever lies in improved liquidity visibility and orchestration.

In retail banking, the opportunity is shaped by holding limits, which are expected to sit around €3,000 to €4,000 per individual. Without such limits, deposits could potentially move out of banks at scale—up to €1 trillion. Even within these constraints, real-time visibility into wallet balances provides a clearer view of available liquidity, enabling improved treasury optimisation, collateral usage and liquidity solutions.

The larger opportunity sits in wholesale banking. Tokenised central bank money is expected to transform settlement processes, enabling faster delivery-versus-payment transactions, more efficient cross-currency payment flows and enhanced liquidity management, with further potential for repo, collateral and TARGET-based settlement as wholesale infrastructure evolves.

Banks that can manage liquidity seamlessly across these domains will be able to optimise balance sheet deployment, develop new structured treasury products and generate incremental revenue from settlement and collateral services.

Digital euro readiness therefore creates a platform for new, balance sheet-driven revenue opportunities—not just compliance alignment.

Because the digital euro impacts architecture, operations and commercial models simultaneously, banks need an approach that proves value early.

A combined strategy-and-pilot model allows banks to define their role and roadmap, validate integration and control frameworks, and test priority use cases in real conditions. This reduces risk while accelerating time to value and avoiding overinvestment as standards evolve.

The digital euro creates a clear opportunity for banks to retain control of the customer interface, rebalance the economics of cash infrastructure and unlock new liquidity and settlement revenue pools.

Banks that act early can implement these capabilities on their own terms within a modular and controlled architecture. Those that delay risk revenue leakage to third-party providers, higher transformation costs under compressed timelines and reduced control over both customer relationships and liquidity positioning.

Publicis Sapient supports banks end-to-end, from strategy through to the implementation of a modular integration architecture designed to work with, rather than replace, existing systems.

This enables banks to achieve readiness without large-scale disruption, orchestrate digital euro capabilities across the enterprise and capture both cost efficiencies and new commercial value pools, while maintaining long-term architectural flexibility.