For decades, large financial institutions have been locked in a cycle of managing, rather than eliminating, their mounting technical debt. Despite years of digital ambition and billions spent on modernization, the reality is stark: the Global 2000 are burdened with an estimated $1.5–2 trillion in accumulated tech debt. This isn’t just a technical nuisance—it’s a structural liability that slows innovation, drains budgets, and locks banks into operating models that can’t keep pace with today’s market demands. The result? Only 30% of organizations have fully modernized their core applications, while the rest are stuck in a perpetual state of incremental change, unable to break free from legacy constraints.
Historically, banks have turned to outsourcing, staff augmentation, and piecemeal automation to cope with legacy complexity. But these approaches have often become part of the problem, incentivizing the management of complexity rather than its elimination. The prevailing service model—measured in hours billed and bodies deployed—has normalized stagnation, leaving banks with armies of people maintaining brittle systems instead of building for the future. As a result, transformation has too often meant layering new technology on top of old, rather than reimagining the enterprise from the ground up.
A new era is dawning. AI—especially in the form of agentic AI and Services-as-Software—is emerging as the jackhammer that can finally break through the concrete of legacy systems. According to recent HFS/Publicis Sapient research, 80% of enterprise leaders believe AI will improve modernization outcomes, and four in five want to pivot away from labor-based service models. AI can now read and rewrite legacy code, automate integration and testing, and compress years of technical debt remediation into weeks. But the real breakthrough comes when AI is not just another tool, but the foundation of a new operating model.
The future of IT services in banking is not about more people—it’s about smarter systems. Services-as-Software represents a fundamental shift: services are delivered primarily through technology, minimizing human intervention and maximizing efficiency. This model is technology-driven, leveraging advanced software and AI agents to deliver outcomes at scale. In this paradigm, banks pay for value, not volume; for outcomes, not effort. The days of FTE-based pricing and staff augmentation are giving way to subscription, outcome-based, and consumption-driven commercial models.
Breaking free from tech debt requires more than new technology—it demands a decisive shift in how banks build, partner, govern, and lead. Here are the five moves that separate AI-native leaders from those automating their stagnation:
Publicis Sapient is at the forefront of this transformation, helping financial institutions smash through tech debt and rewire their operating models for the AI era. Our proprietary platforms, Slingshot and Bodhi, are purpose-built to accelerate this journey:
Together, these platforms enable banks to:
Our joint research with HFS reveals a clear mandate for change:
Banks that act boldly—demolishing tech debt, re-architecting around AI, and embracing new service and commercial models—will be best positioned to lead in the next era of financial services.
Tech debt is no longer just a technical issue. It’s a business risk, a cost drain, and a competitive liability. In a world where efficiency is king and customer expectations are rising, waiting is surrender. The opportunity is here: AI is the jackhammer, and Services-as-Software is the blueprint for a post-tech-debt enterprise. With the right strategy, partners, and platforms, banks can finally break free from legacy constraints and build for what’s next.
Ready to smash through tech debt and rewire your operating model for the AI era? Publicis Sapient is your partner for bold, outcome-driven transformation.