The financial services sector—encompassing banks, insurers, and asset managers—faces a unique convergence of challenges as it seeks to modernize. Regulatory complexity, legacy technology, and ever-rising customer expectations have created a landscape where tech debt is not just a technical liability, but a strategic threat. Today, artificial intelligence (AI) stands out as the catalyst capable of breaking through these barriers, enabling financial institutions to move from incremental improvements to transformative change.
Tech debt in financial services is staggering, with global estimates reaching up to $2 trillion across major enterprises. Unlike other industries, financial institutions must contend with deeply entrenched legacy systems, strict regulatory requirements, and the imperative to deliver secure, personalized experiences at scale. According to recent research, while 30% of IT budgets are allocated to modernization, only a minority of organizations have successfully modernized their core applications. The result is a widening gap between business ambition and technological reality.
AI is not just another tool in the modernization toolkit—it is the jackhammer that can dismantle the most persistent forms of tech debt. More than 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.
Through executive roundtables and industry engagements, five critical “debts” have been identified that financial services organizations must address to unlock AI’s full potential:
Publicis Sapient’s work with leading institutions, such as Deutsche Bank, demonstrates how addressing these debts holistically—by building AI/ML catalogs, modernizing data infrastructure, and driving new business models—can lay the foundation for rapid, sustainable AI value creation.
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. However, 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.
The future of financial services belongs to organizations 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. The time to act is now: with AI as the catalyst, financial services organizations can rewrite the rules of modernization and lead the next wave of industry innovation.