Regional Spotlight: Core Modernization in Asia Pacific—Navigating Unique Regulatory and Digital Challenges

The APAC Banking Landscape: A Region Defined by Complexity and Opportunity

Asia Pacific (APAC) is at the forefront of digital banking transformation. With some of the world’s highest rates of digital adoption, a rapidly evolving fintech ecosystem, and a diverse patchwork of regulatory environments, the region presents both immense opportunities and unique challenges for banks seeking to modernize their core systems. As digital-first competitors and customer expectations accelerate, core modernization has become a strategic imperative for banks across APAC—whether they are established incumbents or ambitious challengers.

Why Core Modernization Is Top of Mind in APAC

Banks in APAC are facing a convergence of pressures:

Legacy Technology Constraints: Decades-old core systems are expensive to maintain, slow to adapt, and hinder innovation. The cost and risk of maintaining these systems are rising, while customer expectations for seamless, real-time experiences continue to grow.
Regulatory Complexity: APAC’s regulatory landscape is highly fragmented. Each market—from Australia to Thailand to Singapore—has its own data residency, privacy, and compliance requirements. Regulators are increasingly demanding robust, auditable, and flexible systems that can adapt to new rules at speed.
Digital Adoption and Competition: The region’s consumers are among the most digitally savvy in the world. Neobanks and fintechs are raising the bar for customer experience, forcing traditional banks to accelerate their digital transformation or risk losing relevance.

The Modernization Imperative: Moving Beyond the Monolith

Modernizing the core is no longer about replacing one monolithic system with another. Instead, APAC banks are embracing modular, cloud-native architectures that enable agility, scalability, and rapid product innovation. This shift allows banks to:

Launch new products and services at speed
Integrate with fintech partners and ecosystems
Meet evolving regulatory requirements
Unlock real-time data for better decision-making and customer personalization

Navigating Regulatory and Market Nuances

APAC’s regulatory diversity means that a one-size-fits-all approach to modernization simply doesn’t work. Banks must tailor their transformation strategies to local requirements, such as:

Data Residency: Many APAC regulators require that customer data be stored within national borders, influencing cloud deployment models and vendor selection.
Compliance by Design: Modernization programs must embed compliance and security from the outset, leveraging automated controls and continuous monitoring to meet both current and future regulatory demands.
Incremental Migration: Given the risks of “big bang” migrations, APAC banks are increasingly adopting coexistence strategies—running legacy and new cores in parallel and migrating products and customers in phases to minimize disruption.

Case Study: Rapid Transformation in Thailand

A leading Thai retail bank exemplifies what’s possible in APAC. Facing the dual challenge of legacy technology and strict regulatory obligations, the bank partnered with Publicis Sapient and Thought Machine to deliver a new business model and robust technical foundation in just 12 weeks. The transformation included:

A front-to-back banking platform
A new mobile app and payment platform
A real-time data lake for actionable insights

This rapid deployment proved that even highly regulated banks in APAC can innovate at pace, launching new products quickly, adapting to market demands, and meeting compliance requirements—all while delivering experiences customers love.

Actionable Insights for APAC Banks

Start with a Clear Vision: Modernization is a business transformation, not just a technology upgrade. Define your goals, customer outcomes, and regulatory obligations up front.
Embrace Coexistence: Avoid risky, all-at-once migrations. Run legacy and new systems in parallel, migrating in phases to manage risk and ensure business continuity.
Leverage Proven Accelerators: Use repeatable blueprints, frameworks, and accelerators to reduce time-to-market and avoid common pitfalls.
Prioritize Data: Ensure data is accessible, normalized, and ready for real-time use—unlocking the potential for AI-driven insights and personalized experiences.
Partner for Success: Work with transformation partners who bring deep regional knowledge, regulatory expertise, and a robust ecosystem of fintech collaborators.

Why Publicis Sapient?

Publicis Sapient has a proven track record of helping APAC banks modernize at speed and scale. Our end-to-end expertise—from strategy to build—combined with deep partnerships with leading fintechs like Thought Machine and Mambu, enables us to deliver measurable business outcomes in even the most complex regulatory environments. Whether launching a new digital bank or transforming an incumbent, we help clients break free from legacy constraints, meet regulatory demands, and create the customer experiences that drive growth.

Ready to Modernize in APAC?

The future belongs to banks that can adapt, innovate, and deliver at speed. With the right strategy and partners, APAC banks can turn regulatory complexity and digital disruption into a competitive advantage. Let’s build the bank of tomorrow—today.