Industry Deep Dive: Core Modernization for Mid-Tier and Challenger Banks—Accelerating Transformation with Limited Resources

The Modernization Imperative for Mid-Tier and Challenger Banks

Mid-tier and challenger banks are at a pivotal crossroads. The digital banking revolution, once the exclusive domain of global giants, is now a necessity for every institution seeking relevance and growth. For these ambitious banks, legacy technology, mounting regulatory demands, and the relentless pace of customer expectations create a unique set of pressures. The question is no longer if core modernization should happen, but how quickly and effectively it can be achieved—especially with leaner resources and less margin for error than their larger counterparts.

Unique Pressures and Opportunities

Unlike top-tier incumbents, mid-tier and challenger banks must balance agility and innovation with cost efficiency and risk management. They face:

Agility Demands: The need to launch new products and services rapidly to compete with fintechs and digital-first banks.
Complex Compliance: Navigating increasingly complex regulatory requirements with robust, auditable, and flexible systems.
Customer Expectations: Delivering seamless, personalized, omnichannel experiences at speed.
Cost Constraints: Maintaining and patching legacy systems is expensive and stifles innovation, making modernization both a necessity and a challenge.

Yet, these constraints also create opportunities. With the right approach, mid-tier and challenger banks can leapfrog legacy limitations, outpace larger rivals, and deliver differentiated customer experiences.

Accelerating Modernization: Proven Approaches for Leaner Banks

Publicis Sapient’s approach is tailored for banks that need to move fast without compromising on quality or compliance. Our methodologies, accelerators, and deep partnerships with leading fintechs—including Thought Machine and Mambu—enable mid-tier and challenger banks to modernize their core and launch new platforms in record time.

Leveraging Accelerators and Repeatable Blueprints

XBank: Our packaged solution for building a neobank or launching new digital products can deliver a working bank in as little as nine months. XBank fuses ready-made strategies, operating models, accelerators, and architectures, tailored to your business needs.
Repeatable Blueprints: Drawing on global experience, we leverage unique intellectual property and accelerators to fast-track transformation, integrating with legacy systems and aligning with regulatory standards from day one.
Agile, Multidisciplinary Teams: Strategy, product, experience, engineering, and data experts work side-by-side in agile sprints, ensuring rapid delivery and continuous improvement.

Strategic Fintech Partnerships

Thought Machine: Deploying Vault, a cloud-native core banking platform, we help banks of any size innovate faster and create new customer-centric experiences. Our collaboration has proven that even highly regulated banks can transform at speed.
Mambu: As the world’s only true SaaS cloud banking platform, Mambu’s composable approach allows banks to assemble the right components for their needs, enabling rapid integration and deployment.

Practical Migration Tips: De-Risking and Accelerating Value

Core modernization is complex, but with the right approach, risks can be mitigated and value realized quickly. Here are key tips for a successful migration:

Start with a Clear Vision: Define your business goals and customer outcomes. Modernization is not just a tech upgrade—it’s a business transformation.
Embrace Coexistence: Avoid risky “big bang” migrations. Run legacy and new cores in parallel, gradually migrating products and customers to minimize disruption and ensure business continuity.
Leverage Proven Accelerators: Use frameworks and accelerators to reduce time-to-market and avoid common pitfalls.
Prioritize Data: Ensure data is accessible, normalized, and ready for real-time use—unlocking the potential for AI-driven insights and personalized experiences.
Partner for Success: Work with transformation partners who bring deep industry knowledge, regulatory expertise, and a robust ecosystem of fintech collaborators.

Repeatable Blueprints: Building for Scale and Compliance

Publicis Sapient’s modernization blueprints are designed to be repeatable and scalable, ensuring that each transformation is faster and less risky than the last. These blueprints:

Integrate with existing legacy systems, reducing the need for disruptive overhauls.
Embed compliance and security by design, leveraging automated controls and continuous monitoring.
Support modular, API-driven architectures for rapid product development and ecosystem integration.
Enable agile, cross-functional teams to iterate quickly and deliver value at every stage.

Case Studies: Transformation at Speed and Scale

A Leading Thai Retail Bank:

A leading Thai retail bank needed more than a new app—they required a new business model and a robust technical foundation. In just 12 weeks, Publicis Sapient, in partnership with Thought Machine, delivered a front-to-back banking platform, connecting a new mobile app, payment platform, and real-time data lake. The result: the bank can now launch new products at speed, adapt to changing market demands, and meet regulatory obligations—all while delivering experiences customers love. This rapid transformation proved that even with limited resources, banks can innovate at pace and scale.

OSB Group:

OSB Group, a leading UK specialist lender, partnered with Publicis Sapient to build a greenfield core banking platform powered by Mambu and a suite of fintech tools. Within 12 months, the new platform launched, delivering 90% straight-through onboarding, 13 self-service options, and real-time customer insights. The result: a scalable, customer-first foundation for future growth, improved operational efficiency, and a significant boost in deposits.

Why Publicis Sapient?

Speed and Scale: Launch new banks or products in as little as three to nine months.
Proven Track Record: From APAC to EMEA, we’ve helped banks transform at pace, delivering measurable business outcomes.
End-to-End Expertise: From strategy to build, we cover every aspect of digital banking transformation.
Ecosystem of Partners: Our relationships with best-in-class fintechs, cloud providers, and technology vendors ensure you have the right tools for every challenge.

Ready to Modernize?

The future belongs to banks that can adapt, innovate, and deliver at speed. With Publicis Sapient, mid-tier and challenger banks can break free from legacy constraints, meet regulatory demands, and create the customer experiences that drive growth. Let’s build the bank of tomorrow—today.

Contact us to start your core modernization journey.