Kyndryl Research: 21% of Financial Firms Struggle to Realise Value from IT Modernisation

Kyndryl has revealed that more than one in five banking and financial services organisations are seeing limited or unclear value from their IT modernisation efforts. For fintech professionals, this highlights a critical disconnect between digital ambitions and business reality, as half of the sector reports being behind schedule while struggling to translate technical agility into meaningful customer experience gains.

What was announced

Kyndryl’s 2026 Modernization Report, a global study of 2,000 business and technology leaders across 12 sectors, reveals a significant performance gap in the financial services industry. While 38% of banking and financial services organisations cite agility, innovation, and scalability as their primary drivers for IT modernisation, the actual returns are inconsistent. Only 36% of these institutions report a major improvement in customer experience, a figure that lags behind other operational metrics.

The data shows that while half of the surveyed organisations have achieved faster delivery of new capabilities, products, or features, and 42% have successfully reduced operating or infrastructure costs, execution remains a hurdle. Currently, 50% of financial services organisations admit to being behind schedule on their modernisation objectives. This delay has tangible consequences; 49% of respondents stated that postponing these initiatives has left them unable to adopt new capabilities with the necessary speed. The findings suggest that the industry is entering a phase where the success of technology investments will be measured by tangible business outcomes—such as operational efficiency and long-term performance—rather than the mere implementation of new systems.

"For banks and financial institutions, the real modernisation test is whether investments are improving operations, making services more responsive and delivering meaningful value to customers. Organisations are rightly prioritising agility and innovation, but these ambitions need to translate into measurable business outcomes. That means aligning technology decisions more closely with commercial priorities, breaking down silos between business and IT teams, and treating modernisation as a continuous process rather than a series of isolated projects."

Andy Hughes, SVP GTM Kyndryl UK&I

The companies involved

Kyndryl is a provider of mission-critical enterprise technology services, focusing on the design, management, and modernisation of the complex information systems that underpin the global economy. The company occupies a central role in the financial services ecosystem, frequently partnering with major institutions to manage large-scale infrastructure transitions and cloud integrations. With a significant presence in the UK and Ireland market, Kyndryl positions itself as a strategic partner for organisations navigating the shift from legacy hardware to hybrid cloud environments.

The firm’s market position is defined by its ability to handle high-stakes technical debt and regulatory compliance requirements for Tier 1 banks and insurance providers. By leveraging its scale and deep technical expertise, Kyndryl aims to bridge the gap between traditional mainframe reliability and the flexibility required by modern digital banking platforms. Its recent research initiatives, such as the 2026 Modernization Report, reflect its broader strategy of moving beyond pure infrastructure management to provide data-driven insights into how technology investments impact the commercial bottom line of its clients.

What FF News has reported before

FF News has tracked Kyndryl’s expanding footprint in the financial sector through several high-profile partnerships. In late 2026, the publication detailed how CLS and Kyndryl Complete Major Infrastructure Modernization for Global FX Settlement, a project aimed at enhancing the resilience of critical market infrastructure. Earlier that year, the company demonstrated its focus on emerging technology when Kyndryl, Incore Bank, and Google Cloud Automate Bank KYC with Gemini Agentic AI. This followed a 2023 announcement where Kyndryl Unveils Banking and Financial Industry Services for Google Cloud Customers. Additionally, the firm’s long-term service model was highlighted when Kyndryl Signs 7-Year agreement with Legal & General, securing a major role in the insurer’s digital transformation journey.

What this means

This report signals a shift in the power dynamic between bank boards and their IT departments. The "blank cheque" era of digital transformation is ending; as 21% of firms struggle to see value, the pressure on CTOs to justify spend through customer-facing metrics will intensify. The fact that half of the industry is behind schedule suggests a systemic underestimation of legacy complexity. This creates an opening for nimble fintech challengers who are unburdened by technical debt, while putting traditional vendors under pressure to move beyond simple migrations toward outcomes-based service models that guarantee measurable efficiency gains.