Canadian organisations target USD $25M in savings with AI in mainframes

New research indicates that 86% of Canadian organisations have either implemented or plan to implement AI or generative AI in their mainframe environments, and more than a quarter expect to save over USD $25 million as a result.

Survey findings

The 2025 State of Mainframe Modernization Survey from Kyndryl, based on responses from 500 IT and business leaders across several global regions, highlights a significant shift in strategic priorities regarding mainframe modernisation. In Canada, AI technologies are being utilised for functions such as fraud detection, security testing, and performance optimisation. Rather than replacing mainframe systems, organisations are employing AI to enhance their existing capabilities.

The study found that globally, organisations anticipate cost savings of USD $12.7 billion and new revenue of USD $19.5 billion in the next three years through AI and generative AI applied within mainframe environments. In Canada specifically, more than half (61%) of organisations have at least half of their mission-critical applications residing on the mainframe, and 82% of businesses consider its operability crucial.

Changing strategies

According to the report, 73% of Canadian organisations have revised their mainframe modernisation strategies over the past year and half of them have increased their usage or made fresh investments into the platform. The survey revealed a broader trend, with 80% of all organisations adapting their modernisation strategies in response to changes in market dynamics, geopolitical developments, regulatory requirements, and new technologies.

As part of this shift, modernisation project costs are reported to be falling, with returns on investment climbing. Respondents cited returns between 288% and 362%, depending on the type of modernisation approach - whether modernising existing mainframes, integrating with the cloud, or migrating workloads to new platforms.

AI and talent gaps

The integration of AI is now seen as a present catalyst for change, with nearly 90% of organisations either implementing or intending to implement generative AI on the mainframe. Collectively, respondents expect to save about USD $13 billion and generate new revenues exceeding USD $20 billion over the next three years. The adoption of AI is also beginning to address skills shortages across mainframe-related roles.

Mainframe modernisation increasingly demands a workforce adept in both legacy and emerging technologies. In Canada, 64% of organisations report challenges in finding professionals with the right mix of skills, especially those skilled in mainframe security. Globally, 70% struggle to find suitable multi-skilled talent and 74% continue to rely on third-party providers to deliver on their modernisation objectives.

Regulation and security

The influence of regulation is also evident, with 88% of Canadian respondents noting that compliance requirements are shaping their modernisation decisions. More than two-fifths (43%) say this is resulting in greater collaboration between IT, security, and compliance teams. Internationally, 94% of respondents acknowledge that their modernisation efforts are heavily influenced by regulatory considerations, while security remains central to their efforts.

"The mainframe has become the AI-fueled catalyst of hybrid enterprise strategies, delivering billion-dollar returns while powering innovation for customers," said Hassan Zamat, Global Practise Leader for Core Enterprise at Kyndryl. "Organisations are taking a much more pragmatic approach to modernization to drive better business outcomes and incorporate new technologies. Working with the right partners can help them build a resilient and future-ready platform."

As mainframe modernisation becomes more challenging and urgent due to changing geopolitical environments, market forces, and regulatory pressures, the report suggests AI could play a crucial role in ensuring secure, cost-effective updates to essential IT infrastructure. The findings indicate that, despite the rapidly evolving digital landscape, the mainframe continues to underpin the critical operations of most large organisations surveyed.