Benchmark Your Banking IT Modernization Strategy

Banks face mounting pressure from digital disruption, regulatory changes, and rising customer expectations. The Modernization Index, an assessment tool built by IDC, helps financial institutions benchmark progress, identify technology gaps, and prioritize IT investments.

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The Modernization Index, developed by IDC, is a comprehensive assessment framework that evaluates how mature an organization’s IT modernization strategy truly is. By examining critical dimensions—including infrastructure agility, application modernization, data readiness, security posture, and operational efficiency—the Index offers a clear view into where enterprises are leading, where they’re falling behind, and which areas present the greatest opportunity for improvement.

A significant number of banks have completed the Modernization Index, and the results reveal strong trends in how financial institutions are modernizing, how they’re strengthening security as part of that journey, and what strategic investments are driving the most meaningful outcomes.

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INSIGHT SUMMARY

Modernization trends in banking: AI-ready, secure hybrid strategies

Leading banks are focusing IT modernization on AI readiness, hybrid cloud, core modernization, data governance, and next-generation security.

For banking leaders, this means modernization must balance AI enablement with security, compliance, and legacy system realities—rather than isolated cloud or tool adoption.

Leading banks worldwide use learnings from the Index to:

Key insights from banks taking the assessment

42 ^%

cite cybersecurity as the top modernization challenge

81 ^%

prioritize improving data quality and data governance

72 ^%

prioritize improving data quality and data governance

Where financial leaders are focusing now

Based on the Modernization Index's findings, industry leaders are concentrating their efforts in five areas:

AI-readiness for smarter security

Banks are deploying AI-ready infrastructure to strengthen fraud detection and automate risk assessment. Leveraging AI to enhance code quality can help reduce errors and operational risk in proprietary applications.

Strategic hybrid cloud adoption

Cloud adoption is accelerating, and security remains paramount. Financial institutions are building interoperable hybrid and multi-cloud environments to gain flexibility while keeping sensitive data protected.

Revitalizing core applications

Leaders are modernizing core banking platforms by removing legacy bottlenecks, adopting microservices for faster updates, and integrating SaaS solutions to deliver digital experiences that customers expect.

Data governance & management

Data is a critical asset. Institutions are breaking down silos and centralizing data on secure platforms, establishing clear lineage and maintaining compliance with regulations such as GDPR and CCPA.

Next-gen cybersecurity

With financial data in constant demand by bad actors, zero-trust security models are becoming standard. Priorities include robust audit trails, advanced encryption, and securing older systems that remain deeply integrated across the enterprise.

Overcoming common banking hurdles

The path to modernization is rarely linear, but many organizations face similar challenges. Recognizing this is the first step toward progress:

Unlocking siloed data to power advanced analytics and AI initiatives that drive growth.

Balancing the cost of new technologies with the need for continuous, compliant operations.

Enforcing consistent security and privacy policies across a global, distributed enterprise.

Navigating core banking system upgrades while managing organizational change.

OUTCOMES

Real-world outcomes from IT modernization initiatives

It’s certainly been a long time since we had an unplanned outage — perhaps three years— which is unheard of in our industry.

Kevin Angus Manager Banking, Payments, and Ancillary Systems

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Resources

Whitepaper

Dive deeper into research-backed strategies for accelerating your modernization journey.

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InfoBrief

Get a snapshot of key findings and trends shaping IT modernization.

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Ready to benchmark your IT modernization strategy?

See how your organization stacks up against industry peers and identify your next strategic move.

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Frequently asked questions

The IT Modernization Index is an assessment tool built by IDC to help organizations benchmark their IT modernization progress. It enables organizations to identify technology gaps, compare their maturity against industry peers, and prioritize IT investments that support long-term modernization goals.

Banks face several common challenges in their modernization efforts, including cybersecurity risks, improving data quality and governance, and building AI skills. Many organizations also struggle with unlocking siloed data, balancing modernization costs with regulatory compliance, maintaining consistent security policies, and managing the complexity of upgrading core banking systems.

Financial leaders are focusing on five key areas: building AI-ready infrastructure, adopting secure hybrid and multi-cloud environments, revitalizing core applications to remove legacy bottlenecks, strengthening data governance and management, and implementing next-generation cybersecurity practices to protect sensitive financial data.

How Are You Benchmarking Your Bank’s IT Modernization Strategy?

Modernization trends in banking: AI-ready, secure hybrid strategies

Leading banks worldwide use learnings from the Index to:

Key insights from banks taking the assessment

42 ^%

81 ^%

72 ^%