Financial services organizations—banks, insurers, and asset managers—are at a pivotal crossroads. Years of incremental technology investments have left many with a tangled web of legacy systems, siloed data, and mounting technical debt. Unlike other industries, financial services must navigate a unique convergence of challenges: deeply entrenched legacy technology, stringent regulatory requirements, and the imperative to deliver secure, hyper-personalized experiences at scale. The result? A staggering $1.5–2 trillion in accumulated tech debt across the world’s largest enterprises, with financial services bearing a disproportionate share.
Despite allocating nearly 30% of IT budgets to modernization, only a minority of organizations have successfully modernized their core applications. This gap between ambition and reality manifests as operational inefficiencies, slow time-to-market, and an inability to fully leverage transformative technologies like artificial intelligence (AI).
Through extensive industry engagement, five critical forms of “debt” have been identified that financial services organizations must address to unlock the full potential of AI:
Addressing these debts holistically is essential for rapid, sustainable AI value creation. For example, Publicis Sapient’s work with leading institutions has shown that building AI/ML catalogs, modernizing data infrastructure, and driving new business models lay the foundation for enterprise-scale AI adoption.
AI is not just another tool in the modernization toolkit—it is the jackhammer capable of dismantling even the most persistent forms of tech debt. Over 80% of senior executives in financial services believe AI is the breakthrough needed to overcome entrenched technical debt. However, technology alone is not enough. Success demands a shift in mindset, delivery models, and operating architecture.
A key insight from recent research is the emergence of “services-as-software”—a new paradigm where technology, not just people, delivers services. For financial services, this shift is critical. Traditional IT services often focus on maintaining legacy systems rather than driving transformation. AI-led service models, by contrast, enable:
Three in four enterprise leaders now expect a pivot from staff augmentation to services-as-software, and 71% are ready to switch providers for better AI execution and leadership. The message is clear: financial institutions that fail to embrace AI-driven modernization risk being left behind.
AI-driven modernization is already delivering measurable impact across the financial services value chain:
Customer expectations in financial services have never been higher. AI enables hyper-personalization—tailoring products, services, and interactions to individual needs and behaviors. Banks and insurers are deploying AI-powered recommendation engines, proactive service bots, and omnichannel experiences that build trust and loyalty. These innovations require robust data strategies and secure, compliant platforms.
Despite the promise of AI, many financial institutions remain stuck in the experimentation phase. Key barriers include:
To move from pilots to production, financial services leaders must:
Publicis Sapient’s SPEED model—Strategy, Product, Experience, Engineering, and Data & AI—provides a holistic framework for AI-driven modernization. By connecting business strategy with technology execution and customer experience, this approach ensures that transformation is actionable, compliant, and sustainable.
Strategic partnerships with technology leaders such as AWS, Google Cloud, and Microsoft further accelerate modernization, enabling secure, scalable, and industry-specific solutions. Proprietary platforms like Sapient Slingshot and Bodhi empower financial institutions to automate the software development lifecycle, modernize legacy systems, and scale AI adoption with confidence.
Publicis Sapient’s work with leading financial institutions demonstrates the tangible benefits of AI-driven modernization:
The future belongs to financial institutions that can break free from tech debt and harness AI as a driver of innovation, efficiency, and customer value. By addressing technology, data, process, skills, and cultural debts in tandem, banks, insurers, and asset managers can move from incremental change to enterprise-scale transformation.
Publicis Sapient stands as a trusted partner for this journey—combining deep industry expertise, proven frameworks, and a relentless focus on outcomes. With AI as the catalyst, financial services organizations can rewrite the rules of modernization and lead the next wave of industry innovation.
Ready to smash through tech debt? Let’s talk about your modernization journey.