Banks are under growing pressure to modernize, but many continue to rely on outdated systems that drain resources and restrict innovation. These legacy platforms are expensive to maintain, slow to update, and make it difficult to keep up with regulatory and customer expectations. As digital-native competitors and fintech challengers expand their presence, the shortcomings of older technology become more apparent. Financial institutions that want to remain competitive cannot depend on the size of their IT budget alone. Instead, success lies in smarter allocation of resources, prioritizing technology that improves efficiency, compliance, and customer experience.
Recent findings from BCG in their article: “Tech in Banking 2025: Transformation Starts with Smarter Tech Investment” underline this point clearly: increasing technology spending without a clear strategy does not guarantee results. In fact, some banks with the largest IT budgets still struggle to deliver meaningful transformation because their investments are spread too thinly or directed to the wrong priorities. What makes a difference is focusing on areas that truly drive performance. Investments in automation, AI, and cloud-based solutions offer faster payback, lower costs, and higher returns on equity. According to Accenture’s analysis, banks that accelerate their cloud and AI adoption see cost-to-income ratios drop significantly, while also improving operational resilience as mentioned in their article “Tech in Banking 2025: Transformation Starts with Smarter Tech Investment”.
This shift from spending more to spending smarter represents a turning point in the industry. It challenges the long-standing view that scale alone defines success. Instead, it suggests that carefully chosen, scalable technologies can level the playing field between large incumbents and smaller, more agile institutions. By choosing targeted investments rather than blanket upgrades, banks can free up resources for innovation while still reducing risk and increasing compliance.
Cloud Adoption and AI at Scale
Cloud adoption is one of the areas where this difference is most visible. Accenture’s research shows that less than 10% of core banking workloads have moved to the cloud, even though these workloads represent the largest source of potential transformation value. The reluctance often stems from concerns around control, security, and regulatory compliance. However, hybrid and multi-cloud models now allow banks to maintain compliance while gaining the scalability and flexibility needed to compete. This combination reduces vendor lock-in and makes institutions more resilient to future changes in regulation or market conditions.
When cloud capabilities are combined with artificial intelligence, the results become even more compelling. Accenture highlights that banks implementing cloud and AI together are achieving up to 4.9% revenue growth and as much as a 29% increase in pre-tax profits. These numbers illustrate the scale of value available to those willing to modernize strategically. AI enables banks to automate risk assessments, speed up lending decisions, and improve fraud detection, while cloud ensures that these innovations can be scaled securely across the organization. Together, they represent a powerful foundation for both growth and efficiency.
The challenge, however, lies in overcoming the grip of legacy systems. Many banks find themselves locked into outdated infrastructures that make it difficult to deploy new technologies effectively. This creates operational bottlenecks, increases costs, and exposes the institution to compliance risks. By prioritizing digital platforms that replace manual, siloed processes with integrated, automated workflows, banks can begin to break free from these constraints. Strategic modernization is not simply a technology project but an organizational shift towards agility, efficiency, and long-term resilience.
Looking Ahead
The message from both BCG and Accenture is clear: transformation in banking is no longer about the size of the budget but the intelligence of investment choices. Institutions that embrace cloud migration, scale AI responsibly, and gradually phase out legacy dependencies will be positioned for stronger, more sustainable growth. Those that hesitate risk falling further behind as competitors move faster and customers demand more seamless, digital-first experiences.
At Bluering, we share this vision of smarter transformation. Our no-code, cloud-ready lending platforms and risk rating solutions are designed to help institutions modernize effectively, without unnecessary complexity or cost. By aligning investment with real business needs, we support banks in delivering faster services, stronger governance, and long-term growth. Smarter technology choices today will define the leaders of tomorrow’s financial services industry.
Source: BCG and Accenture Banking Blog