Financial institutions are navigating an increasingly complex landscape. Their transformation, powered by cloud computing, artificial intelligence (AI), generative AI (gen AI) and agentic AI, has become essential to their ability to adapt and compete.
Our 2025 Banking and Capital Markets Cloud, Data & AI Rotation Index research analyzed 78 large global banks to determine where they are on their journey to cloud and embracing AI. Among the findings are that top-performing institutions are already boosting their return on equity by 125 basis points (BPS) while reducing cost-to-income ratios by 452 BPS. And that every 1% of their workload migrated to cloud significantly improves their AI adoption.
Here are the key strategic moves that successful banking and capital markets leaders are making to reinvent their business and drive long-term growth.
- Hybrid cloud delivers a competitive edge
In many banking boardrooms we hear a similar refrain: executives want flexibility, but they cannot sacrifice control. This often leads to partial migration or ”tech tourism”, which makes systems more complex. Ultimately, the value delivered often disappoints.
Hybrid cloud delivers on the design brief of flexible control and it’s now the preferred long-term model for banking and capital markets leaders. It enables compliance without compromise and balances agility with risk exposure. Yet only 31% of banks have adopted a multi-cloud strategy, leaving the rest vulnerable to concentration risk and vendor lock-in.
- Core banking is your greatest untapped resource
Core systems remain the biggest challenge for modernizing bank systems as they are complex, costly, hold sensitive data and changing them entails operational risk. Only 10% of core workloads have moved to the cloud and this represents the biggest untapped source of transformation value for financial institutions.
Early movers in sales & trading and consumer lending are already unlocking real-time processing, integrated risk and scalable AI. The key here is looking beyond the cost to grasp the capability. Core modernization is the gateway to real-time decisioning, embedded compliance, and AI at scale.
- Cloud and AI are fueling performance — not just tech upgrades
Right now, the future of banking is being shaped by how decisively leaders connect cloud and AI to business performance. In our recent executive engagements, one pattern is unmistakable: the banks that are moving fastest aren’t just migrating workloads—they’re monetizing intelligence.
According to our analysis, top-performing institutions are already capturing a 125-basis-point lift in return on equity while cutting cost-to-income ratios by 452 basis points.
- What real AI value looks like
shows that fast-tracked gen AI implementation is already delivering an average 29% increase in pre-tax profit. The value is concentrated in five functions—customer servicing, lead origination, IT engineering, product development and risk management—which together account for 59% of the total impact.
In our work with clients, we approach AI as a business model transformation, not just a technology upgrade. We’re applying it across critical areas such as fraud prevention, credit assessment, risk modeling and customer servicing. Our research shows that, in a fast implementation scenario, gen AI has significant potential to produce major outcomes at scale. Within three years, gen AI could deliver:
– Revenue uplift: Up to 4.9% increase in revenues.
– Cost optimization: A 7.7% reduction in operational expenses.
– Pre-tax profit growth: 29% improvement.
- Gen AI without proper governance is a risk not worth considering
While gen AI adoption is accelerating, many banks are still searching for value without a clear roadmap. The hard truth is that 63% of institutions report having limited or no governance frameworks for gen AI, creating a recipe for risk and instability.
The leading banks we work with build responsible governance, talent pipelines and financial metrics into their AI strategies from day one. Clear performance metrics should be established to ensure AI initiatives are delivering tangible value. By building this robust foundation of cloud, data and discipline, banks can move effectively beyond AI pilots to real business performance.
- To close AI talent gaps, look within
While most financial institutions agree on the need for more AI talent, the real challenge may lie in leadership and change management, not the talent pipeline.
Many banks lack structured training programs, defined career paths and clearly integrated AI roles. By helping organizations use the potential of their existing talent, we’ve helped them to rewire their talent strategies and embed AI fluency across functions. The result has been faster AI adoption, stronger outcomes and it creates a culture of curiosity.
The next step: Move from ambition to value
Banking’s competitive advantage increasingly depends on aligning cloud migration with AI implementation. Success requires addressing three critical barriers: legacy infrastructure that hampers innovation, governance frameworks that create compliance bottlenecks, and talent shortages in cloud-native and AI expertise.
Our study shows that industry leaders who effectively deploy AI are reporting significant improvements in return on equity, cost-to-income ratios and pre-tax profits.
For senior banking executives, the imperative is clear: orchestrate cloud and AI as integrated transformation programs. AI is going to define the future of banking: so design with this mindset In today’s competitive landscape, this alignment is essential for sustainable growth and market leadership.
If you would like to learn more about the research and have a discussion, please contact me
