PUBLISHER: The Business Research Company | PRODUCT CODE: 1888313
PUBLISHER: The Business Research Company | PRODUCT CODE: 1888313
Legacy system modernization for banks is the process of updating or replacing outdated banking information technology (IT) systems with modern technologies and architectures. Its key purpose is to enhance efficiency, security, and scalability while supporting modern digital banking requirements.
The key components of legacy system modernization for banks are software and services. Software refers to specialized modernization platforms, tools, and solutions used to upgrade outdated core banking systems, migrate applications to modern environments, and integrate new digital functionalities. Various bank types, including retail banks, commercial banks, and investment banks, also include deployment modes such as on-premises, cloud-based, and hybrid. The various enterprise size categories, including small and medium enterprises and large enterprises, apply to applications across banking, financial services and insurance (BFSI), healthcare, retail and e-commerce, manufacturing, information technology (IT) and telecommunications, government, and others.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the financial sector, particularly in investment strategies and risk management. Heightened tariffs have fueled market volatility, prompting cautious behavior among institutional investors and increasing demand for hedging instruments. Banks and asset managers are facing higher costs associated with cross-border transactions, as tariffs disrupt global supply chains and dampen corporate earnings, key drivers of equity market performance. Insurance companies, meanwhile, are grappling with increased claims risks tied to supply chain disruptions and trade-related business losses. Additionally, reduced consumer spending and weakened export demand are constraining credit growth and investment appetite. The sector must now prioritize diversification, digital transformation, and robust scenario planning to navigate the heightened economic uncertainty and protect profitability.
The legacy system modernization for banks market research report is one of a series of new reports from The Business Research Company that provides legacy system modernization for banks market statistics, including legacy system modernization for banks industry global market size, regional shares, competitors with a legacy system modernization for banks market share, detailed legacy system modernization for banks market segments, market trends and opportunities, and any further data you may need to thrive in the legacy system modernization for banks industry. This legacy system modernization for banks market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The legacy system modernization for banks market size has grown rapidly in recent years. It will grow from $11.35 billion in 2024 to $13.29 billion in 2025 at a compound annual growth rate (CAGR) of 17.1%. The growth in the historic period can be attributed to the increasing adoption of Internet of Things devices, rising demand for smart city initiatives, growing use of location-based services, expansion of connected infrastructure, and increasing focus on energy efficiency.
The legacy system modernization for banks market size is expected to see rapid growth in the next few years. It will grow to $24.66 billion in 2029 at a compound annual growth rate (CAGR) of 16.7%. The growth in the forecast period can be attributed to the growing integration of machine learning, rising implementation of 5G networks, expansion of smart home ecosystems, increasing demand for real-time data analytics, and greater emphasis on personalized user experiences. Key trends in the forecast period include technology advancements in sensor networks, continuous innovations in artificial intelligence (AI)-driven ambient systems, rapid developments in edge computing solutions, research and development in context-aware technologies, and adoption of advanced data processing techniques.
The increasing focus on cybersecurity and regulatory compliance is expected to drive the growth of the legacy system modernization for banks market going forward. Cybersecurity and regulatory compliance involve safeguarding systems and data while meeting mandated controls, reporting, and audit requirements set by financial regulators. This focus is driven by rising cybercrime complaints and escalating financial losses reported by authorities. Modernizing legacy cores and channels enables stronger controls, including encryption, identity management, logging, faster patching, and automated compliance evidence, helping banks meet security and audit obligations. For example, in March 2023, the Federal Bureau of Investigation (FBI), a US-based primary federal law enforcement agency, reported 880,418 complaints in 2023, nearly a 10% increase compared to 2022, with losses exceeding $12.5 billion (up 22% year over year), highlighting the growing threat pressure that fuels security and compliance investments. Therefore, the rising focus on cybersecurity and regulatory compliance is propelling the legacy system modernization for banks market.
Major companies in the legacy system modernization for banks market are leveraging cloud-native innovation to enable faster, customer-centric banking. Cloud-native core banking and payments platforms allow rapid product launches and modernized banking operations. Solutions from companies such as DXC Technology and Thought Machine use cloud-native core banking and managed services to modernize legacy systems, supporting automation-driven operations, code-free configuration, resilience, and compliance, thereby accelerating digital transformation and enhancing operational efficiency. For instance, in June 2025, DXC Technology, a US-based global IT and consulting services company, launched a joint solution with Thought Machine to accelerate banking modernization for small and midsize banks. The solution combines DXC's industry expertise and managed services with Thought Machine's cloud-native core banking (Vault Core) and payments platform (Vault Payments), enabling banks to launch new products, including savings accounts, mortgages, and loans, in hours instead of weeks while ensuring operational efficiency, regulatory compliance, and scalable, automation-driven operations. By providing a one-stop managed service, it simplifies end-to-end modernization, reduces time-to-market, and supports faster adoption of innovative, customer-centric banking services.
In January 2025, Accenture plc, an Ireland-based professional services company, acquired Digital Twin Technology for Banks from Percipient.ai, Inc. for an undisclosed amount. Through this acquisition, Accenture aims to leverage Digital TWINN to help banks modernize core systems by creating a real-time virtual replica of legacy and modern platforms, enabling faster innovation and seamless integration without disrupting existing operations. Percipient.ai, Inc., a US-based company, provides digital twin solutions that create virtual duplicates of banks' legacy and modern systems, integrating and unifying data from each into a single real-time hub.
Major players in the legacy system modernization for banks market are Microsoft Corporation, Deloitte Touche Tohmatsu Limited, Accenture plc, International Business Machines Corporation, PricewaterhouseCoopers International Limited, Tata Consultancy Services Limited, Fujitsu Limited, NTT DATA Corporation, Capgemini SE, Cognizant Technology Solutions Corporation, Infosys Limited, DXC Technology Company, HCL Technologies Limited, Atos SE, Wipro Limited, Tech Mahindra Limited, EPAM Systems Inc., Mphasis Limited, Persistent Systems Limited, Temenos AG.
North America was the largest region in the legacy system modernization for banks market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in legacy system modernization for banks report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the legacy system modernization for banks market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The legacy system modernization for banks market includes revenues earned by providing services such as application re-hosting (lift-and-shift), application re-platforming, application re-architecting (micro services and cloud-native), code refactoring and re-engineering, core banking and mainframe modernization, and data migration and database modernization. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Legacy System Modernization for Banks Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on legacy system modernization for banks market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for legacy system modernization for banks ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The legacy system modernization for banks market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.