In April 2026, HFS Research published its Challengers’ Code report, “Banking and payments firms, update your transformation playbook to be domain-native,” authored by Executive Research Leader Melissa Fersht. The report examines why traditional IT services models are increasingly falling short for banks, payment providers, and fintechs and highlights a new generation of domain-focused engineering firms, Opus Technologies as a case in point, that are helping reshape the industry’s transformation agenda. 

Since its publication, the report has become a focal point across executive conversations. Whether at industry conferences, customer meetings, analyst discussions, or on LinkedIn, one theme has remained consistent: leaders want to understand what concepts such as domain-native engineering and Services-as-Software actually mean and, more importantly, what they imply for their own transformation strategies. 

In this article, we answer some of the questions we hear most frequently from banking, payments, and fintech leaders, drawing on insights from the HFS report alongside Opus’ experience delivering complex transformation programs across the financial services industry. 

What is Domain-Native Engineering?

Simply put, domain-native engineers understand the business before they write the technology. In banking and payments, that means engineers who already understand issuing, acquiring, settlement, network mandates, fraud operations, merchant ecosystems, and regulatory requirements – not engineers learning the business while simultaneously building critical platforms. 

As Opus CRO Prakash Devulapalli explains, “We don’t just write code. We engineer with context.” 

At Opus, domain-native engineering combines three elements: 

• deep expertise across banking, payments, and fintech  

• understanding of business processes and lifecycle  

• modern engineering excellence  

The result is fewer translation gaps between business and technology teams, faster decision-making, shorter learning curves, and platforms designed around business outcomes rather than technical specifications alone. 

What is Services-as-Software?

Perhaps the most discussed concept from this report is the HFS Services-as-Software. It represents a new way of delivering technology services. 

Historically, services scaled by adding people. Services-as-Software scales through a combination of AI, automation, reusable engineering assets, and domain expertise. 

Rather than measuring success by hours billed or team size, organizations measure outcomes – speed of delivery, operational resilience, regulatory readiness, and business value. 

HFS believes this represents a structural shift in the technology services industry and estimates the Services-as-Software market could exceed $1.5 trillion by 2035. 

For banking and payments firms, where regulatory deadlines and platform evolution increasingly occur at software speed, this model offers a way to improve delivery predictability while reducing dependency on purely labor-based execution. 

Where does Opus fit into this transformation?

Within the report, HFS positions Opus as one of a new generation of domain-focused engineering firms helping reshape banking transformation. 

Rather than competing on scale alone, Opus differentiates through deep specialization in banking, payments, and fintech. 

As the report notes, “Domain-focused providers like Opus Technologies are emerging to support these needs as alternatives to legacy software development lifecycle services.” 

This specialization is reflected in what Opus calls the Opus Trifecta: 

• a value-creation mindset  

• domain-native engineering skillset  

• AI-augmented engineering toolset 

Together, these capabilities enable clients to modernize critical payment platforms, accelerate delivery, reduce operational risk, and create long-term engineering capability rather than simply completing projects. 

The emphasis shifts from delivering software to enabling business transformation. 

No conversation today is complete without the AI question. So, How does Opus apply AI?

AI is another area where the report highlights a meaningful shift. 

Many financial institutions have moved beyond asking whether they should adopt AI. Their challenge today is determining where AI can create measurable value while operating safely within regulated environments. 

Opus approaches AI through two complementary layers. 

The first is an AI-infused software development lifecycle that improves planning, development, testing, documentation, and quality engineering. 

The second is agentic AI applied to business workflows such as fraud detection, dispute resolution, and merchant onboarding. 

As Prakash Devulapalli notes in the report, “The real opportunity in AI for payments lies at the intersection of domain depth and intelligence.” 

This reflects an important principle throughout the HFS report: AI delivers the greatest value when combined with industry expertise rather than deployed in isolation. 

Human oversight remains central, ensuring regulatory compliance, engineering quality, and governance while AI accelerates execution. 

What measurable outcomes has Opus delivered?

Ultimately, transformation is judged by outcomes rather than architecture diagrams. 

The HFS report highlights several Opus client engagements demonstrating what domain-native engineering and AI-enabled delivery can achieve. 

Among the examples cited: 

• Zero critical production incidents following modernization of a mission-critical payment platform.  

• Regulatory mandate implementation cycles reduced from months to just two to three weeks.  

• AI-assisted software engineering reducing delivery effort by 30–40%.  

• Merchant onboarding accelerated by 60%.  

• Infrastructure modernization enabling fivefold transaction growth.  

While every transformation journey is unique, these examples reinforce the report’s broader conclusion: organizations combining domain expertise with AI-enabled engineering are achieving faster delivery, greater resilience, and stronger business outcomes. 

What should banking and payments leaders do next?

The HFS report closes with strategic recommendations for banking and payments leaders: 

• Stop buying bodies and start buying engineering outcomes. 

• Re-architect payment platforms for constant change using modular, API-driven designs. 

• Embed automation across testing and compliance workflows. Prioritize domain depth over generalist scale. 

• Treat platform modernization as a strategic capability, not back-office plumbing. 

• Bring a partnership mindset, because how a partner behaves when things go wrong tells you more than any pitch deck.