Global Core Banking Software Market Overview
The key driver impacting the core banking software market is the growth in deployment of core banking solutions at banks that allow customers to perform numerous banking activities, such as loans, money transactions, and easy access to their accounts. The high customer adoption leads to mounting interest and increased investment in technology-driven innovation related to financial services. For instance, in 2018, total investment activity in Financial technology (fintech) reached $120 billion, across about 2,600 deals. Since 2014, there have been over 11,000 fintech investments totaling about $380 billion. Moreover, global technology firms are rising their incursion into financial services. Jointly, the total volume of new credit offered by fintech and “big tech” in 2017 surpasses $500 billion, a tenfold boost from 2014.
According to Value Market Research, the global core banking software market was valued at around USD 16.38 billion in 2019 and is estimated to grow at a CAGR of about 7.5% during the forecast period of 2020-2026.
The Core banking software is also adopted by multiple banks to enhance their risk management capabilities for an easy flow of banking activities is also estimated to be an important determinant adding growth to the market. In addition to this, the increasing customer demand for advanced banking technologies is also predictable to enhance market demand in the forecast period. For instance, As per the OECD report 2020, around 85% of millennials in the United States use mobile banking, and it is expected that the share will be higher for the generation born after 1996. Moreover, mobile payments for consumer goods is prevalent in China and now constitute 16% of China’s GDP.
However, the lack of awareness among businesses regarding advanced banking technologies may hamper the global core banking software industry in the long run. The current industry trend, such as advancements in core banking technology with the growing adoption of innovative technologies to attract new-age customers and harvest better growth prospects from cutting edge technologies such as blockchain data analytics and machine learning, is expected to provide beneficial market opportunities for the key players in the forecast years.
The core banking software markets are vast, with a large number of global and local players. The key leaders follow various strategies to strengthen their market position, such as increasing product portfolio, expansions, mergers, acquisitions, and product innovations to enlarge their market share at the global level. For example, in August 2020, Fidelity National Information Services, Inc. (FIS) had launched ClearEdge, a core banking software solution. It is the latest subscription-based core banking software that can make easy and accelerate the access to the advanced technology that banks will exploit for serving their customers during the post-pandemic phase. The crucial players included in the report are Capgemini, Finastra, FIS, Fiserv, Inc., HCL Technologies Limited, Infosys Limited, Jack Henry & Associates, Inc., Oracle Corporation, Temenos Group, and Unisys.
In this research report, the core banking software market is segmented by solution, service, deployment, end-use, and region.
Analysis by Solution:
By solution, the report is categorized into deposits, loans, enterprise customer solutions, and others.
The enterprise customer solutions segment dominates the solution segment in 2019 with a maximum market share of 40%. It is due to the growing demand for Enterprise customer solutions across banking and other financial institutions as it can be easily integrated with ERP and CRM and can administrate management tools and information of clients via a bank central database. Moreover, it helps banks and financial institutions expand their reach and achieve economies of scale by data integration for multiple purposes such as cross-selling, CRM, and regulatory reporting. It also improves financial institutions' functioning, reduces operational costs, and presents a sole interface to control banking activities, thus contributing to the forecast period's enterprise customer solutions segment growth.
Analysis by Service:
By services, the report is categorized into professional service and managed service. The professional service segment is accounted for the largest share of 70% in 2019. It is due to the rising need for support at every stage of the software deployment process, together with the pre-implementation of scope and consulting, project management, and integration. Moreover, the professional service providers offer on-demand support and resources at affordable IT service costs to small and medium enterprises, thus driving the professional service segments in the forecast period.
Analysis by Deployment:
By deployment, the report is categorized into the cloud and on-premise. The on-premise segment is accounted for the largest share of 60% in 2019. It is due to the increase in building an on-premise system leads to improved security, fully customizable, and high scalability. Moreover, mid to large-sized businesses whose primary concern is based on complete control and improved privacy give preference to on-site systems contributes to on-premise segment growth in the forecast period.
Analysis by End-User:
By end-user, the report is categorized into banks, financial institutions, and others. The bank segment is accounted for the largest share of 55% in 2019. It is due to the financial institutions and banks are widely adopting core banking software to prevent theft and fraud with real-time banking facilities. These technologies help banks in increasing operational efficiency and minimizing manual work. Moreover, the growing need to centralize record-keeping and permit access from any location encourages installing core banking solutions at multiple bank branches and then interconnected by computer networks based on satellite telephones.
Analysis by Region:
In the regional outlook of the global core banking software market, the North America region dominates with a maximum market share of 25% in 2019. It is due to the early adoption of core banking software solutions by enterprises in the region coupled with small and medium enterprises in the U.S., and other areas of North America are implementing these solutions for the sufficient flow of banking activities. Moreover, the rapidly expanding sizes of enterprises and the growing application area of these solutions contribute to the core banking software market's growth across North America.
Market Segmentation covered in the Report:
- Enterprise Customer Solutions
- Professional Service
- Managed Service
- Financial Institutions
- North America
- The Asia Pacific
- Latin America
- The Middle East and Africa
This market research report has been produced by gathering information on the basis of primary and secondary research. Secondary research has been done by using various sources which include (but not limited to) Company Websites, Paid Data Sources, Technical Journals, Financial Reports, SEC Filings, and other different industry publications.
If specific information is required which is not currently within the scope of the report, it can be provided as a part of customization.