Core Banking Software Industry Overview
The global core banking software market size is expected to reach USD 21.61 billion by 2030, registering at a CAGR of 9.3% from 2023 to 2030, according to a new report by Grand View Research, Inc. The market growth can be attributed to the surge in the adoption of core banking technology across banks and financial institutions globally. This technology is helping numerous banks across the globe synchronize their front, mid, and back-office tasks.
Core banking software offers a comprehensive suite of capabilities to power the digital transformation of financial institutes. Numerous banks across the globe are adopting core banking solutions to gain a comprehensive set of capabilities, including extensive parameterization, flexible product factories, reusable business components, and product bundling. These capabilities are helping banks achieve innovation-led growth.
In recent years, the amount of structured and unstructured data available to banks has increased significantly. With advances in machine learning and cloud computing technologies, Artificial Intelligence (AI) is shaping the prospects of financial and banking services. Moreover, with the data history captured using AI-based solutions, core banks across the globe can make more informed business decisions on various functions, including customer experience, back-office operations, product management, and marketing.
The COVID-19 pandemic adversely affected the growth of the market for core banking software. However, banks across the globe are focusing on adopting time and cost-efficient modes of banking that are capable of reducing their operational expenses and improving customer experience. This is expected to create growth opportunities for the market over the forecast period.
Core Banking Software Market Segmentation
Grand View Research has segmented the global core banking software market based on solution, service, deployment, end-use, and region:
Based on the Solution, the market is segmented into Deposits, Loans, Enterprise Customer Solutions, and Others.
- The enterprise customer solutions segment dominated the market in 2022 and accounted for more than 46.0% share of the global revenue. Enterprise customer solutions seamlessly integrate with CRM and ERP systems and administrate management tools and customer information through the central database of a bank.
- Core banking solutions allow inter-connectivity between branches of the same financial institution and bank and facilitate the management of loan, deposit, and credit processing. These solutions are integrated with a back-end system, which efficiently processes various banking transactions across the multiple branches of a bank.
Based on the Service, the market is segmented into Professional Service, and Managed Service.
- The professional service segment dominated the market in 2022 and accounted for more than a 76.0% share of the global revenue. Banks across the globe are focusing on adopting open-system architecture and platform-independent and cutting-edge technology. Professional service providers help banks smoothly integrate these technologies with existing and future operational systems.
- The managed service segment is anticipated to register the highest growth over the forecast period. Banks and financial institutions across the globe are focusing on integrating their systems using APIs to reduce upgrade and maintenance costs, thereby creating growth opportunities for managed services segment.
Based on the Deployment, the market is segmented into Cloud, and On-premise.
- The on-premise segment dominated the market in 2022 and accounted for more than 59.0% share of the global revenue. When building an on-premise system, businesses assume the full responsibility of integration and any IT-related and security issues. Companies with legacy platforms often partner with IT professionals for the data recovery process and to reduce security concerns and operational costs.
- The cloud segment is anticipated to register the highest growth over the forecast period. Financial institutions and banks with on-premise infrastructure are focusing on adopting cloud-based solutions to compete against more innovative digital opponents. Cloud technology helps automate workflows and operations, resulting in increased efficiency, cost savings, and security.
Based on the End-use, the market is segmented into Banks, Financial Institutions, and Others.
- The banks segment dominated the market in 2022 and accounted for more than 56.0% share of the global revenue. The growth of the segment can be attributed to the vast advancements in information technology and the growing network of the internet across the globe. These technologies help banks reduce manual work and increase operational efficiency.
- Network technology and core banking solutions allow banks to centralize record-keeping and permit access from any location. Numerous banks across the globe are focusing on implementing custom applications for core banking. The financial institutions segment is expected to witness significant growth over the forecast period. Financial institutions are widely adopting core banking software to prevent theft and fraud with real-time banking facilities.
Key Companies Market Share Insights
The market is moderately fragmented and marked by stiff competition from prominent players operating in this industry. Joint ventures, partnership agreements, mergers and acquisitions, product innovations, geographical expansions, and increased focus on RD activities are some of the key strategies adopted by prominent players to ensure long-term sustenance in the market. For instance, in October 2020, Finastra launched Fusion Payments To Go, a pre-packaged payment solution, to implement domestic and cross-border payment services in small and medium-sized banks across the U.S., Europe, and South Africa. This solution provides better functionalities and operating rules to support clearing and settlement mechanisms, improve customer experience, and deliver revenue growth.
Core banking solution providers are focusing on developing ready-to-use financial solutions that have a strategic advantage over other players. Vendors are focusing on using client feedback to improve the capabilities of their digital platforms and financial solutions. For banks and financial institutions concerned about the limitations of their core architecture platforms, vendors are offering solutions based on the clients’ professional approach. Some of the prominent players operating in the global core banking software market are:
- Capgemini
- Finastra
- FIS
- Fiserv, Inc.
- HCL Technologies Limited
- Infosys Limited
- Jack Henry Associates, Inc.
- Oracle Corporation
- Temenos Group
- Unisys
Order a free sample PDF of the Core Banking Software Market Intelligence Study, published by Grand View Research.
About Grand View Research
Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.
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