Leaving Legacy Architecture: The State of Play for Capital Markets

Finadium
July 2025

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The move to modernize infrastructure is gathering pace among financial institutions. The majority of the world’s top banks continue to use mainframes but many see a pressing need to update creaking decades-old legacy systems. The primary solution is to migrate workloads from mainframe or on-premises platforms to the cloud.

The need for change is driven by interlinked factors. For example, a looming skills shortage in legacy technologies and technical debt that reduces business agility, making it hard to adapt to regulatory changes such as the move to T+1. Data integration and access are key issues, particularly as building blocks for artificial intelligence (AI). There are direct costs to maintaining on-premises and mainframe licenses, infrastructure, middleware and personnel. Moreover, the optics of being seen as a modern company using the latest technology is desirable.

This paper looks at the progress capital markets firms have made in modernizing core technology infrastructure and the drivers of change. It evaluates the business case for modernizing legacy applications and migrating to the cloud, which includes the fact that cloud is not always a cheaper option. It outlines a roadmap for running a successful migration project, including selecting the right tools and implementation partners to reduce risk and ensure an effective transition. It also looks at some future trends, including the role of AI in modernizing legacy code and how the industry’s technology strategy could evolve.

This report has been written for business and IT decision makers at market participants, infrastructure providers and technology vendors seeking to understand industry dynamics and practical considerations around legacy technology modernization.

Table of Contents

• Executive Summary
• The Growing Urgency for Technology Modernization
• Building the TCO Cloud Business Case
  • – The Non-TCO Intangibles
• The Continuing Value of Mainframes
• A Strategic Vision for Cloud Maturity
• Executive Recommendations for Successful Cloud Implementations
• The Role of AI
• About Finadium LLC