Published 4th June 2026
New industry research points to a structural execution crisis across treasury and capital markets functions, with implications for competitiveness, risk, and growth.
At its core, the modernization push in treasury and capital markets is not driven by a single catalyst, but by a convergence of internal pressures and external forces that together make transformation feel less like a choice and more like a necessity. The latest report from Celent demonstrates that despite significant investment in digital transformation, many treasury and capital markets functions are struggling to translate innovation into tangible outcome.
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What is driving the modernization journey?
For many institutions, the starting point is operational reality. Organizations are discovering that their current operating model is simply not scalable as they try to address legacy platforms, fragmented workflows, and heavy reliance on manual processes. There is also a growing recognition that change capacity itself is finite. With skills shortages affecting nearly half of institutions and complex dependency chains across systems, even well-funded transformation programs struggle to gain traction.
At the same time, the world around these institutions has shifted. Regulatory requirements are expanding in both scope and intensity, placing new demands on data quality, reporting, and control frameworks. Initiatives such as accelerated settlement cycles and enhanced surveillance are not optional, and they require significant investment and coordination.
Beyond regulation, competitive dynamics are evolving rapidly. Fintechs, digital-native banks, and platform providers are setting new expectations for speed, transparency, and automation. What was once considered innovation is quickly becoming baseline capability.
Overlaying all of this are broader pressures such as cybersecurity risks, operational resilience requirements, and macroeconomic uncertainty. Collectively, these forces are shortening decision cycles and forcing institutions to become more agile in how they respond. Taken together, these pressures have reshaped the conversation. Modernization is no longer about staying ahead. It is about keeping up.
Complexity hampers adaptability
What ties these internal and external drivers together is competitiveness. Modernization is often framed as a transformation agenda, but in practice it has become a proxy for staying relevant. Firms are not investing in cloud, automation, data platforms, and AI simply to innovate. They are doing so to maintain speed to market, control costs, meet regulatory expectations, and deliver better client outcomes. The ambition is to create an operating model that is flexible, scalable, and resilient enough to adapt to constant change. There is, however, an important nuance. Modernization is often treated as a panacea, with automation, AI, and cloud positioned as solutions that can resolve structural issues almost by default.
Celent’s research shows otherwise. These technologies only deliver value when underlying complexity is reduced and data foundations are strengthened. Without that, institutions risk layering new capabilities on top of existing problems, which can actually increase operational strain rather than relieve it.
The transformation agenda
In many institutions, data, AI, and automation are still spoken about as if they were separate transformation tracks, each with its own roadmap and investment case. In reality, they are tightly interdependent and succeed or fail together.
Automation depends on clean, consistent, and accessible data to eliminate manual intervention, while AI depends on that same foundation to generate reliable insights and support decision-making at scale. Without trustworthy data, automation simply accelerates inefficient processes, and AI amplifies existing inconsistencies rather than resolving them.
At the same time, automation plays a critical role in creating the structured, high-quality data flows that AI requires, closing the loop between execution and intelligence. What emerges is not three parallel journeys but a single, interconnected transformation, where progress must be coordinated across all three dimensions to deliver meaningful and sustainable impact.
Targeting efforts where they deliver the greatest value
Prioritizing modernization that has the most impact sets the right scene for further development. The reflection regarding what has a real impact and what is driven by vanity or the latest trends, is crucial.
Ensuring that investments are directed toward initiatives that deliver measurable business value, rather than fragmented or purely experimental innovation. This requires a disciplined approach to aligning technology transformation with strategic priorities, operational efficiency, and revenue growth.
Changing the business while running the business
One of the defining challenges in treasury and capital markets today is the need to change the business while continuing to run it.
Transformation does not happen in a controlled environment, but within systems that are always on and deeply interconnected. Complexity is the first and most persistent barrier, as even small changes must navigate a web of dependencies across trading, risk, finance, and operations. This is compounded by entrenched siloes, where fragmented platforms and data prevent a unified view and slow decision-making.
On top of this, regulatory demands consistently take priority, absorbing scarce delivery capacity and forcing teams to focus on mandatory compliance rather than structural improvement.
The result is a constant balancing act, where progress is possible, but rarely at the speed or scale institutions intend.
What can we expect?
There is, however, reason for cautious optimism. Most institutions are grappling with the same structural challenges, which makes this less an individual failure and more a shared industry moment. The direction is clear, and the building blocks of transformation are well understood. More importantly, a growing number of firms are beginning to demonstrate that progress is possible. By simplifying architectures, strengthening data foundations, and aligning execution more closely with strategy, they are starting to break out of the cycle that has held others back. These early successes matter, not because they are widespread, but because they prove that the gap between ambition and reality can be closed with the right focus and discipline.
To attend the live webinar with Celent, register here.
