current
Tech Infrastructure Modernization
Banks are modernizing legacy systems to improve agility and efficiency, focusing on cloud, data systems, and agile methodologies.
Themes
Timeframe
near-term
Impact areas
Detailed Analysis
Modernizing legacy technology infrastructure is a key priority for financial institutions. The shift away from outdated mainframes and systems is essential for banks to remain competitive and leverage new technologies effectively. As Murphy emphasizes, "The modernization agenda is still very much a big topic for a number of banks. If they want to be able to deliver on the promise of simplification—which includes reducing cost and leveraging generative AI—they have to make sure they have the right technical foundations in place at their core banking systems, their data systems." This modernization involves replacing older technologies with more advanced solutions, such as converting COBOL-based mainframes to Java microservices. This transition enables greater agility and efficiency, allowing banks to adapt to changing market demands and customer expectations.
Context Signals
Publicis Sapient survey shows only 35% of banks have agile systems.
Regional variations in modernization approaches (e.g., UAE/Saudi Arabia focus on AI, UK/Australia on simplification).
Increasing adoption of cloud computing and microservices architecture.
Edge
Modernized infrastructure can enable faster development and deployment of new financial products and services.
Improved data analytics capabilities can lead to better risk management and personalized customer experiences.
Increased focus on API-driven platforms to facilitate open banking and collaboration with fintech partners.
