Financial services organizations—banks, insurers, and capital markets firms—are at a crossroads. Decades of incremental technology investments have left many with a complex web of legacy systems, siloed data, and mounting technical debt. According to recent research from Publicis Sapient and HFS, the Global 2000 enterprises are carrying an estimated $1.5–2 trillion in accumulated tech debt. For financial institutions, this burden is particularly acute, as they face unique pressures: integrating legacy systems, meeting stringent regulatory requirements, and delivering rapid innovation to stay competitive in a digital-first world.
Despite dedicating nearly 30% of IT budgets to modernization, only three in ten organizations have successfully modernized their core applications. The result? Operational inefficiencies, slow time-to-market, and an inability to fully leverage emerging technologies like artificial intelligence (AI).
AI is no longer a futuristic add-on—it’s the essential lever for breaking free from the constraints of tech debt. Eighty percent of enterprise leaders believe AI will improve modernization outcomes, yet only one in five organizations are scaling AI across multiple functions. The gap between aspiration and execution is often due to barriers such as talent shortages, integration challenges with legacy systems, data quality issues, and regulatory concerns.
What’s needed is a fundamental shift in mindset and operating model. AI-driven modernization isn’t just about automating existing processes; it’s about reimagining how financial services are delivered, governed, and evolved. This means moving from siloed, labor-intensive service models to AI-led, platform-based approaches that accelerate transformation and unlock sustainable growth.
A key insight from the joint Publicis Sapient and HFS report 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.
At Publicis Sapient, we help financial services organizations tackle tech debt and drive modernization through our integrated SPEED capabilities:
Our approach is holistic: we assess data and AI readiness, manage implementation from proof-of-concept to enterprise scale, and help clients establish self-sufficient AI operating models. This ensures that modernization is not a one-off project, but a sustainable capability embedded in the organization.
Publicis Sapient’s work with leading financial institutions demonstrates the tangible benefits of AI-driven modernization:
While the promise of AI is immense, financial services organizations must address key barriers to realize its full potential:
Publicis Sapient’s SPEED model, combined with proprietary platforms like Sapient Slingshot and Bodhi, helps clients overcome these hurdles—accelerating software development, providing pre-vetted AI tools, and embedding governance and ethics into every solution.
To break free from tech debt and lead in the AI era, financial services leaders should:
AI-driven modernization is not just a technology upgrade—it’s a strategic imperative for financial services organizations facing unprecedented disruption. By embracing AI as the jackhammer for tech debt, and leveraging the SPEED capabilities of Publicis Sapient, banks and insurers can unlock new levels of efficiency, innovation, and growth.
Curious how AI can help your organization break free from tech debt? Let’s talk about your modernization journey.