Modern banking is a far cry from the analog processes of yesteryear. Today's smartphone-wielding customers demand hyper-personalized transactions woven seamlessly into everyday life, one-to-one personal service with their data at agents' fingertips, and instantaneous financial insights--and some are even pressing for features like blockchain integration and support for digital currencies. But the ability to serve these customers is not assured: Gartner predicts that by 2025 more than 85% of organizations will move forward with cloud principles, but will not yet be able to fully use cloud-native architectures and technologies. These tools will be key to banks' ability to move to digital ecosystem platforms and develop new services, partner with other players, work effectively with colleagues, and meet customer expectations. Financial institutions are under pressure to future-proof and accommodate emerging technologies such as artificial intelligence (AI), machine learning (ML), and cloud computing--and they are also facing significant infrastructural strains.

Is it surprising to know that 55 percent of legacy financial institutions (FIs) report lacking maturity in core systems? Or that, on average, 15 percent of an FI's annual operating costs go toward maintaining core banking systems that are outmoded? "Migrating to cloud- and AI-based solutions could help FIs handle growing calls for faster banking tools during the COVID-19 pandemic, and recent trends show they are beginning to do so," according to PYMNTS' June 2020 Digital Banks And The Power Of The Cloud Tracker done in collaboration with NuoDB. "Banks are spending approximately 15 percent of their yearly operating budgets on technology upgrades, according to one study, and there has been an increase in partnerships between third-party cloud technology providers and global FIs eager to enhance their online platforms. Many of these legacy banks are also planning to integrate AI [artificial intelligence] tools, but their reliance on outdated infrastructure could be hindering their cloud migration plans. These FIs will have to overcome such frictions to keep pace with competitors," the new Tracker states.