Modernizing core banking systems is one of the most consequential undertakings a financial institution can pursue. The rewards—greater agility, operational efficiency, and the ability to deliver innovative customer experiences—are significant. Yet, the risks are equally profound. Technical, reputational, regulatory, and planning risks can threaten not only the success of the transformation but also the very trust and stability upon which banks are built. At Publicis Sapient, we have helped leading banks navigate this modernization maze, developing systematic, proactive approaches to risk that ensure transformation is not just successful, but scalable and sustainable.
Unlike other digital initiatives, core banking modernization touches the heart of a bank’s operations. The risks are multi-dimensional:
Effective risk management begins with governance. Early in the modernization journey, a centralized governance structure ensures coordinated planning and design. As teams mature, governance should evolve into a federated model, empowering trained teams to deliver independently while maintaining oversight. A Transformation Management Hub (TMH) can provide a unified view of value delivery, coordinate dependencies, and ensure alignment across business, technology, risk, legal, and security functions.
Migration is the linchpin of modernization. The strategy—whether Big Bang, parallel run, or coexistence—must be defined early and aligned to the business case. The focus should be on derisking migration, ensuring timely transition, and decommissioning legacy assets. Early clarity on migration stages and value-release roadmaps helps keep the program on track and responsive to emerging risks.
Risk management cannot be an afterthought. Embedding risk identification and mitigation into agile delivery ensures that risks are surfaced and addressed early. Cross-functional teams, including first and second lines of defense, should be involved in backlog delivery. Automated risk dashboards and digitized controls enable real-time insights, allowing rapid response to emerging issues. Leveraging AI and automation can further enhance risk detection and reduce manual effort.
Automation is essential for value, quality, speed, and risk mitigation. Real-time, data-driven decision-making—supported by automated measurement, monitoring, and reporting—enables rapid unblocking of issues. Embedding automated code reviews, security testing, and compliance checks within CI/CD pipelines ensures that risk management is continuous and scalable.
Modernization introduces new technologies and operating models, requiring a digitally ready workforce. Investment in upskilling, strategic partnerships, and differentiated career paths is critical. Building skills-based communities and providing ongoing training ensures that teams can adapt to new tools and methodologies, reducing the risk of transformation fatigue and talent attrition.
Transformation success hinges on organization-wide engagement. A robust communication plan—covering objectives, stakeholder mapping, channel selection, and feedback mechanisms—ensures alignment and momentum. Transparent, frequent updates help manage expectations, address concerns, and foster a culture of shared ownership.
Publicis Sapient’s frameworks have been proven in complex, high-stakes transformations. For example, in partnership with a leading UK specialist lender, we delivered a greenfield core banking platform that not only met regulatory and operational requirements but also achieved 90% straight-through onboarding and real-time customer insights. Key to this success was a modular, cloud-native architecture, agile delivery, and a relentless focus on risk management at every stage.
Similarly, our work with major banks on cloud migration and platform modernization has demonstrated the importance of moving beyond “lift and shift.” True modernization requires reimagining processes, empowering cross-functional teams, and embedding automation and risk controls from the outset. The result: faster time-to-market, improved compliance, and a foundation for continuous innovation.
Many banks fall into the trap of treating risk management as a checklist exercise or confining it to isolated teams. This leads to stale risk registers, delayed responses, and missed opportunities for early intervention. The most successful programs treat risk as a dynamic, organization-wide concern—integrated into every decision, sprint, and release.
Core banking modernization is not a one-time event but a journey of perpetual evolution. By adopting a systematic, proactive approach to risk—grounded in robust governance, agile delivery, automation, talent development, and transparent communication—banks can master the modernization maze. The payoff is not just a successful transformation, but a resilient, future-ready institution capable of thriving in a rapidly changing financial landscape.
Ready to master risk in your core banking modernization journey? Connect with Publicis Sapient to learn how our proven frameworks and real-world experience can help you avoid pitfalls, accelerate value, and build a scalable foundation for growth.