Cloud Modernization in Banking: Closing the Ambition-Execution Gap by Region
The Global Cloud Imperative—and the Regional Reality
Cloud modernization is no longer a distant ambition for banks—it’s a strategic necessity. As digital transformation accelerates, cloud technology is the foundation for agility, innovation, and the seamless experiences customers now expect. Yet, while the promise of cloud is universal, the journey is anything but. Banks across North America, EMEA (Europe, Middle East, and Africa), and APAC (Asia-Pacific) are progressing at different speeds, shaped by unique regulatory, cultural, and market forces. The result: a persistent gap between cloud ambition and execution, with each region facing its own set of challenges and opportunities.
The Ambition-Execution Gap: A Global Snapshot
Recent industry surveys reveal a striking pattern. Globally, more than two-thirds of banks aspire to have at least 30% of their applications and data in the cloud within three years. Yet, only 28%—the so-called “cloud leaders”—have achieved this milestone. The majority remain in the “follower” or “conservative” categories, with less than a third of their workloads migrated. This gap is especially pronounced in North America, where only 29% of banks plan to have their customer-facing apps in the cloud within three years, compared to much higher ambitions in EMEA and APAC.
The obstacles are significant and multifaceted:
- Security concerns (42%) remain the top barrier, as banks navigate complex regulatory and data protection requirements.
- Lack of cloud skills (36%) and internal understanding of cloud’s business benefits (31%) hinder progress, especially at the board level.
- Regulatory complexity is a major challenge in regions like APAC, where compliance requirements can vary dramatically between markets.
Despite these hurdles, the business case for cloud is compelling. Banks that have embraced cloud-native transformation—not just “lift-and-shift” migrations—are realizing tangible benefits: enhanced automation, faster product development, improved customer experiences, and significant cost efficiencies.
Regional Perspectives: Unique Challenges and Opportunities
North America: Conservative Ambition, Renewed Urgency
North American banks are recognized for their operational resilience and robust regulatory frameworks. However, they are also the least ambitious globally in terms of cloud adoption. Only 29% of North American banks aim to have customer-facing apps in the cloud within three years, and just 60% plan to increase cloud investment—lagging behind EMEA and APAC. Key barriers include:
- Security and compliance concerns remain paramount, with a strong focus on data protection and regulatory scrutiny.
- Cultural inertia and legacy processes often slow the pace of change, with many banks replicating old operating models in the cloud rather than reimagining them.
- Competitive pressure from fintechs and digital-native banks is driving a renewed focus on modernization, but many institutions are still in the early stages of their cloud journey.
Case in Point: Leading North American banks that have moved beyond “lift-and-shift” to embrace cloud-native architectures are seeing measurable gains in agility and customer experience. For example, a global investment firm partnered with Publicis Sapient to migrate mission-critical workloads to AWS, achieving a 20% cost optimization and a 75%+ improvement in application performance and availability.
EMEA: Regulatory-Driven Innovation and Integration Challenges
EMEA banks benefit from progressive regulatory initiatives like PSD2 and open banking, which have spurred investment in cloud-native architectures and real-time data capabilities. Ambition is high—over 80% of banks plan to increase cloud investment—but challenges remain:
- Integration with legacy systems is a significant hurdle, as banks seek to modernize without disrupting critical operations.
- Cross-border compliance adds complexity, requiring robust governance and data management strategies.
- Talent transformation is essential, as banks upskill teams to leverage new cloud capabilities.
Case in Point: Lloyds Banking Group, one of the UK’s largest banks, adopted an incremental “strangler” approach to modernization, prioritizing high-impact interventions and leveraging accelerators like real-time data streaming. The result: a 20–30% reduction in time from backlog to production and a 30% improvement in quality.
APAC: Digital-First Mindset Amid Regulatory Complexity
APAC banks are at the forefront of digital adoption, driven by intense competition, high customer expectations, and the imperative of financial inclusion. Ambition is high—83% plan to increase cloud investment—and the region is home to some of the world’s most innovative digital banks. However:
- Regulatory complexity is acute, with compliance requirements varying dramatically between markets.
- Security and risk management frameworks must be robust to address heightened risks.
- Speed to market is a differentiator, with banks leveraging cloud to launch new products and services rapidly.
Case in Point: Siam Commercial Bank in Thailand partnered with Publicis Sapient to build a cloud-native platform, enabling the launch of a new digital platform in just 12 weeks. This rapid innovation demonstrates the power of cloud-native approaches in APAC’s dynamic market.
Closing the Gap: Tailored Recommendations by Region
For North American Banks
- Move beyond lift-and-shift: Reimagine operating models and embrace cloud-native architectures to unlock agility and innovation.
- Invest in talent and culture: Upskill teams and foster a culture of experimentation and continuous improvement.
- Prioritize security and compliance: Leverage cloud providers’ advanced security features and adopt secure DevSecOps models.
For EMEA Banks
- Integrate legacy and modern systems: Use incremental modernization strategies and accelerators to minimize risk and maintain business continuity.
- Navigate cross-border compliance: Implement robust data governance and leverage cloud-native tools for transparency and control.
- Foster agile, cross-functional teams: Organize around capabilities and customer needs, not legacy products or processes.
For APAC Banks
- Leverage cloud for rapid innovation: Use modular, API-driven architectures to launch new products and services at speed.
- Build robust compliance frameworks: Address regulatory complexity with tailored risk management and governance strategies.
- Focus on customer-centricity: Harness real-time data and AI to deliver personalized, accessible digital offerings.
The Publicis Sapient Advantage: Bridging Ambition and Execution
Closing the ambition-execution gap requires more than technology. It demands a holistic approach that fuses strategy, engineering, experience, and data. Publicis Sapient partners with banks globally to:
- Develop clear, business-led cloud strategies aligned with customer needs and regulatory requirements
- Modernize core systems using cloud-native, composable architectures
- Upskill teams and foster agile ways of working
- Leverage data and AI to unlock new value streams
- Manage risk and compliance through robust security frameworks
Our track record includes enabling rapid product launches for leading banks in Southeast Asia, supporting core modernization for major European institutions, and delivering measurable business impact for North American financial leaders.
The Road Ahead: From Ambition to Action
The journey to cloud modernization is complex, but the rewards are clear. Banks that move beyond incremental migrations to embrace true cloud-native transformation are better positioned to compete, innovate, and grow in a rapidly evolving market. The time to act is now—before digital-native challengers and fintech disruptors seize the advantage.
Ready to close the gap between cloud ambition and execution? Publicis Sapient stands ready to partner with banks at every stage of their cloud journey, helping them realize the full potential of digital transformation—region by region, challenge by challenge.