The z mainframe team does good technical work but then the high price cancels out all the value of that work. I'm not sure if that counts as innovation or not.
So they are just selling to the existing pool of users for which the price just has to come in under the cost/risk of rewriting all their ancient stuff.
If you want to be a high-volume consumer bank (insurance is similar - it's about processing a high volume of transactions), you have few alternatives. You can get a couple mainframes (you should place them in different datacenters), with their extreme reliability and stability, or you can build your infrastructure with commodity distributed systems, but then you'll need to build the same level of reliability out of your unreliable components. Current solutions are getting really good at that, but it's your job to integrate them. In the end, it's not really a matter of how much money you spend, but how you spend it - the numbers will closely match.
Regulators don't really care how you do it, as long as you don't fail to provide adequate guarantees to your customers (banking is extremely regulated, and customers are well protected).
Most of the existing ones already have mainframes because they were early adopters.
If the consumer segment started to develop a sense that their payment cards were glitchy or unreliable, our economy could suffer real consequences. Error free, secure, instant payment experiences are essential. Go visit a local grocery store and measure how long it takes to authorize a transaction each time a card is presented to the terminal. Pay special attention to how fast the Visa and American Express networks are. At my local Kroger the terminal and network setup is so fast that you can use the chip reader almost like a mag stripe reader.
https://usa.visa.com/about-visa/newsroom/press-releases.rele...