Beyond Lift-and-Shift: Achieving True Cloud-Native Transformation in Canadian Banking

Canadian banks are at a pivotal crossroads. As digital disruptors and fintechs redefine customer expectations, the pressure to modernize is mounting. Cloud technology is at the heart of this evolution, promising agility, scalability, and innovation. Yet, many banks fall into a common trap: treating cloud migration as a simple 'lift-and-shift' exercise—moving legacy systems to the cloud without rethinking their operating models, culture, or technology stack. This approach risks missing out on the transformative potential of cloud and can even entrench old inefficiencies in a new environment.

A 'lift-and-shift' migration—simply moving existing applications and processes to the cloud—may deliver short-term cost savings and operational efficiencies. However, it rarely delivers the agility, speed, or innovation that cloud promises. Legacy processes, siloed teams, and outdated approval structures are often replicated in the cloud, creating new bottlenecks and failing to leverage the cloud’s full capabilities. The result: banks solve only small parts of the problem, while digital-native competitors race ahead with new products, personalized experiences, and rapid innovation cycles.

Canadian banks operate in one of the world’s most stable and regulated financial environments. This has fostered trust and security, but also contributed to a slower pace of technology adoption. Now, regulatory initiatives like the open banking mandate and ISO 20022, combined with rising customer expectations—81% of Canadians manage their finances online—are making modernization urgent. The challenge is not just to comply, but to thrive: to deliver hyper-personalized, seamless experiences while maintaining the highest standards of security and compliance.

Achieving genuine cloud-native transformation requires a holistic approach—one that encompasses cultural, operational, and technical shifts. Here’s how Canadian banks can move beyond lift-and-shift and unlock the full value of cloud:

Cloud is not just a new hosting environment—it’s a new way of thinking about technology, operations, and value creation. Banks must move from a mentality of “if it ain’t broke, don’t fix it” to one of continuous improvement and innovation. This means:

• Empowering cross-functional teams: Move away from command-and-control leadership to federated, empowered teams that can iterate quickly, experiment safely, and recover from mistakes.
• Fostering a culture of experimentation: Encourage a 'fail fast, learn fast' mentality, where teams are rewarded for innovation and agility.

A successful cloud transformation demands a reimagining of the bank’s operating model:

• Decentralize decision-making: Replace large, centralized IT teams with small central teams that enforce automated guardrails, while empowering business and technology teams to innovate within secure parameters.
• Adopt agile, cross-functional teams: Organize around capabilities and customer needs, not products or legacy processes. Cross-functional teams can deliver end-to-end value and respond rapidly to market changes.
• Embed continuous learning: Make it safe and inexpensive to experiment, test, and scale new ideas quickly.

True cloud-native transformation is about more than infrastructure:

• Adopt modular, API-driven architectures: Move to microservices and composable platforms that enable rapid innovation, seamless integration, and incremental modernization.
• Leverage automation and DevOps: Streamline IT operations, automate processes, and adopt continuous integration and deployment practices to free teams for value creation.
• Break down data silos: Use cloud-native data architectures to unify customer insights and deliver hyper-personalized experiences.

Canadian banks must navigate some of the world’s strictest data residency and privacy laws. Leading cloud providers now offer the ability to designate data center regions, but managing data sovereignty and privacy remains a top concern. Success requires:

• Built-in compliance capabilities: Utilize audit trails, data retention, and traceability to meet regulatory requirements and reduce compliance risk.
• Secure DevSecOps models: Embed security and compliance into every stage of the development lifecycle.
• Automated, real-time monitoring: Maintain regulatory alignment and customer trust through continuous oversight.

Banks are no longer competing solely with each other. Digital-first fintechs and technology companies are setting new standards for speed, personalization, and customer experience. Canadian banks can learn from global leaders who have:

• Adopted incremental modernization: The “strangler” approach—incrementally replacing legacy components with modern, cloud-native services—minimizes risk and maintains business continuity.
• Leveraged accelerators: Platforms like data streaming layers enable real-time data access and decouple customer-facing innovation from slower-moving core systems.
• Embedded agile and DevOps: Foster a culture of experimentation, rapid iteration, and continuous learning.

Despite widespread recognition of cloud’s potential, many banks struggle to translate ambition into execution. To close this gap:

1. Assess your cloud maturity: Are you simply hosting legacy systems, or leveraging cloud-native services and architectures?
2. Redesign your operating model: Move from centralized, hierarchical structures to empowered, cross-functional teams. Automate governance and enable self-service within secure boundaries.
3. Modernize your core: Invest in modular, API-driven architectures and microservices. Consider journey-led progressive modernization or greenfield cloud-native stacks for new products and services.
4. Foster a cloud-first culture: Champion experimentation, transparency, and learning. Recognize and reward teams for innovation and agility.
5. Leverage ecosystem partnerships: Collaborate with fintechs, SaaS providers, and technology partners to accelerate innovation and fill capability gaps.

Publicis Sapient partners with Canadian banks to move beyond lift-and-shift and realize the full promise of cloud. Our approach combines deep industry expertise, proven methodologies, and partnerships with leading technology providers. We help banks modernize their core, redesign operating models, and foster cultures of innovation—delivering business-wide change at speed. Our track record includes supporting global leaders in launching cloud-native platforms, accelerating product development, and achieving measurable business impact.

The future of banking is cloud-native, agile, and customer-centric. Avoid the pitfalls of lift-and-shift. Rethink your operating model, embrace a new culture, and unlock the true value of cloud. Publicis Sapient stands ready to guide Canadian banks through the complexities of cloud adoption, regulatory compliance, and customer-centric innovation—unlocking the full potential of digital transformation.

Ready to accelerate your cloud journey? Let’s connect.

Relevant Links

• Cloud Adoption in Canadian Banks
• Cloud Adoption in Canadian Banks
• Cloud Modernization in Canadian Wealth Management: Navigating Compliance and Innovation
• Open Banking and Coreless Modernization: Preparing Canadian Banks for the 2025 Mandate
• Adopción de la Nube en la Banca Latinoamericana: Impulsando la Innovación y Cumplimiento en México (LATAM)
• Cloud Modernization in Banking: Closing the Ambition-Execution Gap in France (Europe)