Abstract

The increasing complexity of cross-border financial transactions has exposed the limitations of traditional monolithic core banking systems, particularly in managing volatile currency exchanges, ensuring compliance, and maintaining transaction efficiency. This paper presents a modular microservice-based architecture integrated with an AI-driven currency normalization engine designed to address these challenges. The proposed system features independently deployable services for account handling, KYC, and foreign exchange operations, facilitating agility, scalability, and fault isolation. At its core, the architecture incorporates a hybrid AI engine utilizing LSTM, regression, and transformer models to predict and normalize currency rates in real time, thereby enhancing transaction accuracy and operational responsiveness. An event-driven communication framework, supported by containerization and orchestration tools, ensures seamless integration with legacy infrastructure and high system availability. Empirical evaluations highlight the system’s strong performance across throughput, response time, and predictive accuracy benchmarks. The paper concludes with an analysis of limitations and proposes future enhancements, including blockchain-based remittance support and autonomous compliance agents.