The news: Palo Alto Networks founder Nir Zuk has agreed to acquire the largest stake in California-based Liberty Bank, a $400 million institution. He plans to turn it into a platform for deploying AI tools in financial services.

Zoom out: Zuk’s earlier venture indicates where the Liberty Bank story could be going: He cofounded eOS, a “full-stack agentic” core banking platform and ancillary technology. Its key value proposition is unified data across all banking tools that eOS includes, such as bank operations, risk management, and financial products. Its technology is associated with Israeli bank Esh, in which he also invests.

Trendspotting: Starting a bank with a new license or buying or rebuilding an existing bank’s technology and rebuilding its tech stack from the ground up is a concept entrepreneurs are pursuing. Erebor, which will be a digitally native competitor to lenders that serve the “innovation economy” and some specific industries, received a national bank charter in February.

In addition, Column Bank is an example of a new bank created through the acquisition of a community bank, with technology built from the ground up. In this case, it was to be friendly to developers building fintechs applications. But the principle is the same: Banks fundamentally aren’t designed to evolve.

Implication for banks: Thousands of banks are held back by outdated infrastructure that struggles to support modern banking and payments applications. And AI that works across a bank’s systems is another challenge altogether. Data is siloed in different systems, some of which are years old. But it still has to be available in real time and connected with modern application programming interfaces to support current applications and business needs.

An “AI-native” stack requires an entirely new approach to technology: To be “AI-enabled,” it must be substantially rebuilt. To thrive five years from now, banks must revisit everything they know about their infrastructure and plan for a major organizational and technological transformation.