Legacy System Modernization for Banks Market Report 2026

The legacy system modernization for banks market size has grown rapidly in recent years. It will grow from $13.29 billion in 2025 to $15.53 billion in 2026 at a compound annual growth rate (CAGR) of 16.9%. The growth in the historic period can be attributed to rising maintenance costs of legacy systems, growth of digital banking channels, increasing transaction volumes, expansion of regulatory compliance requirements, early adoption of enterprise IT modernization.

The legacy system modernization for banks market size is expected to see rapid growth in the next few years. It will grow to $28.74 billion in 2030 at a compound annual growth rate (CAGR) of 16.6%. The growth in the forecast period can be attributed to increasing demand for scalable banking platforms, rising investments in open banking ecosystems, expansion of real-time payment infrastructures, growing focus on operational agility, increasing adoption of hybrid cloud deployment models. Major trends in the forecast period include migration from legacy core banking systems, increasing adoption of cloud-native architectures, growing use of api-based banking integration, expansion of modular and microservices platforms, enhanced focus on cybersecurity and resilience.

The growing emphasis on cybersecurity and regulatory compliance is expected to drive the growth of the legacy system modernization for banks market in the coming years. Cybersecurity and regulatory compliance involve protecting systems and data while adhering to mandatory controls, reporting standards, and audit requirements established by financial regulators. The heightened focus on these areas stems from the rise in cybercrime incidents and the increasing scale of financial losses reported by authorities. Modernizing legacy core systems and digital channels enables banks to implement stronger security controls such as encryption, identity management, and activity logging, while also supporting faster patching and automated compliance documentation, helping institutions meet security and audit requirements more effectively. For instance, in March 2023, according to the Federal Bureau of Investigation (FBI), a US-based federal law enforcement agency, a total of 880,418 cybercrime complaints were recorded in 2023, representing nearly a 10% increase compared to 2022, with reported losses exceeding $12.5 billion, up 22% year over year. This trend highlights the growing threat landscape that is driving increased investment in security and compliance, thereby fueling the legacy system modernization for banks market.

Major companies operating in the legacy system modernization for banks market are increasingly focusing on innovation trends such as cloud-native core banking platforms to improve operational efficiency, enhance agility, and accelerate the delivery of customer-centric banking products. Cloud-native core banking platforms are modern systems built on scalable cloud infrastructure that leverage microservices, APIs, and automation to replace traditional monolithic legacy cores, enabling rapid configuration, real-time processing, and compliance with regulatory requirements. For instance, in June 2025, DXC Technology, a US-based global information technology and consulting services provider, launched a joint solution designed to accelerate banking modernization and support the digital transformation of small and midsize banks. This solution combines DXC’s industry expertise and managed services with Thought Machine’s cloud-native core banking platform, Vault Core, and payments platform, Vault Payments, to modernize legacy banking environments. It allows banks to roll out new products such as savings accounts, mortgages, and loans within hours instead of weeks, while maintaining operational efficiency, regulatory compliance, and scalable, automation-driven operations. By offering a comprehensive managed service, the solution simplifies end-to-end modernization, reduces time-to-market, and enables faster adoption of innovative, customer-focused 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 consideration. Through this acquisition, Accenture aims to use Digital TWINN technology to support banks in modernizing core systems by creating real-time virtual replicas of both legacy and modern platforms. This approach enables faster innovation and smoother integration while minimizing disruption to existing operations. Percipient.ai, Inc. is a US-based company that provides digital twin solutions that create virtual duplicates of banks’ legacy and modern systems, integrating and unifying data from multiple platforms into a single real-time operational hub.

Major companies operating 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 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the legacy system modernization for banks market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the legacy system modernization for banks market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, 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.

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