Legacy technology remains one of the most significant barriers to digital transformation for banks worldwide. As customer expectations evolve and digital-first challengers disrupt the market, banks—especially in Canada and other mature markets—are under increasing pressure to modernize their core systems. Yet, the path to modernization is fraught with challenges, from technical debt and regulatory complexity to cultural inertia and budget constraints. This page explores the specific hurdles banks face, highlights proven strategies from global leaders, and outlines actionable steps for CIOs, CTOs, and transformation leaders to accelerate their modernization journeys.
Across regions, legacy systems are consistently cited as a top impediment to digital progress:
The impact is clear: legacy technology slows time-to-market, limits personalization, increases operational risk, and drives up costs. In a world where speed, agility, and customer-centricity are paramount, banks cannot afford to let legacy systems dictate their future.
The urgency to modernize is driven by several converging factors:
Banks around the world are pursuing a range of strategies to overcome legacy constraints. Key approaches include:
Cloud-based core banking systems are rapidly becoming the standard for modernization. Globally, 31–37% of banks cite investment in modern cloud-based core systems as their top operational transformation priority. Cloud migration offers:
Adopting a platform-based approach allows banks to decouple legacy systems and introduce new capabilities incrementally. This enables:
Transformation leaders are embracing agile methodologies to accelerate delivery and foster a culture of continuous improvement. Banks with agile models report:
Investments in AI, machine learning, and automation are helping banks modernize operations and unlock new value from data. These technologies support:
Based on insights from over 1,000 global banking leaders, four strategic moves stand out for banks seeking to modernize their core systems:
Transformation leaders recognize the need to invest in digital innovation to keep pace with digital-first challengers. Benchmarking against peers and disruptors helps set ambitious, relevant goals.
Technology alone is not enough. Leading banks invest in talent development, upskilling, and cultural change to ensure teams can leverage new platforms and ways of working. Agile, cross-functional teams focused on customer outcomes are key.
Building robust networks with fintechs, technology providers, and other partners accelerates innovation and broadens the bank’s capabilities. Open APIs and modular architectures make integration easier and more effective.
Agility is a hallmark of transformation leaders. Embedding agile practices across the organization—beyond IT—enables faster product development, quicker response to regulatory changes, and a more dynamic customer experience.
Banks that have made significant progress in modernization share several traits:
Modernizing core banking systems is not a one-time project—it’s a journey that requires vision, commitment, and a willingness to embrace change. By learning from global leaders and focusing on cloud migration, platform-based models, agile operations, and intelligent technologies, banks can overcome legacy barriers and position themselves for long-term success in a digital-first world.
Publicis Sapient partners with leading banks worldwide to accelerate core modernization, drive operational agility, and deliver the experiences customers demand. The time to act is now—banks that move decisively will define the future of financial services.