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The third-party banking software market size is projected to increase by USD 12.31 billion at a CAGR of 7.55% between 2024 and 2028. In the dynamic landscape of the BFSI industry, operational efficiency is paramount, facilitated by digital technology innovations spanning databases, networking, and cloud computing. Both commercial and retail banks rely on technologically advanced analytical tools and big data analytics to optimize bookkeeping and enhance revenue share. Core banking systems integrate seamlessly with cloud-computing services, ensuring scalable analytics and secure networking. This integration extends to various devices, including smartphones and computers. With a focus on information security and encryption, these advancements not only bolster operational efficiency but also reinforce data protection protocols, shaping the industry's trajectory toward enhanced digitalization and profitability..
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The market share growth by the core banking software segment will be significant during the forecast period. The segment comprises software related to these processes, such as loan, credit, deposit, and funds transfer, and includes software that facilitates multi-channel access via ATMs, Internet, or phone banking. The segment is expected to grow due to an increase in the penetration of retail banking. Initiatives undertaken by the governments of countries such as India, which encourage people to open bank accounts, are one of the primary factors.
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The core banking software segment showed a gradual increase in the market share of USD 7.37 billion in 2018. Furthermore, with the growth in the number of digital channels, customers in the industry expect an omnichannel experience. Consequently, enterprises are transforming their business processes to accommodate new technologies. This, in turn, encourages market players to offer that cater to the growing digital transformation of these enterprises. Therefore, these factors are expected to increase the adoption, which will propel the growth of the segment of the global market during the forecast period.
On-premises is considered highly secure as it is managed and maintained by enterprises in the industry that are using it. Enterprises have complete control over their on-premises solution, which allows them to provide restricted access. Many market players, such as Finastra and Fiserv Inc., are offering these products. In addition, rapidly changing business environments, such as enterprises looking for cost-effective solutions, are encouraging both large enterprises and SMEs to shift toward the adoption these products. Hence, these factors are expected to drive the growth of the on-premises segment in the global market during the forecast period.
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North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in North America is expected to grow as countries in this region, such as the US, are among the most technologically advanced countries and are the pioneers in the adoption of technologies. The top investment banks in this region, such as The Goldman Sachs Group Inc., JPMorgan Chase and Co. and Bank of America Corp., are investing in technology by offering new apps and interfaces to provide better service to their customers in this region.
Furthermore, the growth in digital payments will also increase the demand. Customers in the industry in this region are opting for digital payments, such as net and mobile banking, as they help enhance the ease of handling core operations. Hence, various enterprises are investing in this region to enhance their customer base and to cater to the growing demand from customers. Thus, such factors will lead to the growth of the market in this region during the forecast period.
Within this market, commercial banks are at the forefront of adopting digital technology to enhance operational efficiency and drive economic growth. Cloud-computing services, coupled with databases and networking infrastructure, enable seamless integration of core banking systems and omnichannel banking software. This transition from traditional to computerized methods facilitates financial transaction tracking, bookkeeping, and revenue share optimization.
Leveraging technologically advanced analytical tools, including big data analytics and business intelligence software, enhances risk management and wealth management capabilities. Robust information security protocols, such as encryption, safeguard sensitive data across smartphones, computers, and cloud computing platforms. The holistic approach to digital transformation not only boosts operational efficiency but also ensures compliance with industry standards, fostering synergy between commercial and retail banks in the dynamic landscape of the BFSI industry.
The need for enhanced efficiency in banking operations is the key factor driving the market. It provides a streamlined way to manage a complex set of processes for enterprises in this industry. This industry deals with customers having different types of service requirements and addressing these requirements through a manual process can lead to an increase in cycle time and customer dissatisfaction. Hence, it helps enterprises in providing various services to multiple customers simultaneously, which, in turn, will help in improving the efficiency of these operations.
In addition, it aligns various divisions of these operations such as loan, credit, and investment across different branches of the enterprise and streamlines the database management, which helps in improving the operational efficiency of the enterprise. Furthermore, it enables information exchange among employees of an enterprise across different branches seamlessly and quickly. Thus, such factors will lead to the growth of the global market during the forecast period.
Growing number of digital wallets is the primary trend shaping the market. The enterprises in the industry are witnessing constant innovations in most these works, such as funds transfer through mobile applications such as digital wallet apps. A digital wallet is a software-based system for making online transactions through an app on smartphones. It simplifies online purchases made through tablets, computers, or smartphones. The bank accounts of customers are linked with their digital wallets, and user credentials are verified and securely stored during transactions.
Moreover, the use of digital wallets is continuously increasing across the globe. This is encouraging various enterprises to launch digital wallets to cater to the growing demand from customers. Due to the growing number of digital wallets, enterprises in the industry need to opt for this to keep track of all the transactions made through digital wallets and maintain an effective database. Thus, such factors will drive market growth during the forecast period.
Issues related to data privacy and security is a challenge that affects the market. Big Data and AI can track, retrieve, and analyze data from the connected server. The data of enterprises need to be protected from unauthorized access in the IT infrastructure, which is based on many patchworks of open-source codes. Cloud infrastructure is more affected due to glitches in source code. Furthermore, hackers can easily gain access to cloud-based data storage systems, as they are based on open architecture and shared resources.
Furthermore, as market players are handling susceptible customer information, many financial enterprises are concerned about their data being misused. Consequently, numerous organizations are skeptical about deploying this for their operations, which is limiting the global market during the forecast period.
Market forecasts include the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The Market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 30 market companies, including:
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the market forecast period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
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The market within the BFSI industry is evolving rapidly, driven by the adoption of cloud-computing services and technologically advanced analytical tools. As financial institutions embrace digital technology, they require robust solutions for information security and regulatory compliances.
Innovations like FutureSafe offer optimal asset management solutions, leveraging big data analytics and encryption to ensure secure transactions. The market witnesses continual growth through new product launches and geographic expansions, supported by R&D activities to meet evolving industry trends and economic growth demands.
Transitioning from traditional methods to computerized methods, banks prioritize risk management and financial transaction tracking facilitated by core banking systems. Collaborations and partnerships enhance customer support and pricing strategies, catering to tech-savvy customers seeking seamless digital experiences through mobile banking apps and online account management.
With a focus on regulatory compliance and security, the market integrates artificial intelligence (AI) and Internet of Things (IoT) technologies, ensuring multi-channel applications and omnichannel management for customer-centric core banking. As the demand for cloud-computing applications and computerized accounting rises, the market thrives on standardized processes, enabling private wealth management and interbank network connectivity.
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Third-party Banking Software Market Scope |
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Report Coverage |
Details |
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Page number |
180 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 7.55% |
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Market Growth 2024-2028 |
USD 12.31 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
6.8 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 32% |
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Key countries |
US, China, Japan, UK, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
AAZZUR Ltd., American Express Co., ATOM FINANCE INC., Avaloq Group Ltd., Backbase B.V., Banco Bilbao Vizcaya Argentaria SA, Bank of America Corp., Capgemini Service SAS, Capital Banking Solutions, Fidelity National Information Services Inc., Finastra, Fiserv Inc., HCL Technologies Ltd., Infosys Ltd., Intellect Design Arena Ltd., InvestCloud Inc., JPMorgan Chase and Co., Mambu B.V., MicroStrategy Inc., Oracle Corp., Q2 Holdings Inc., Quinenco S.A., SAP SE, SoFi Technologies Inc., Sopra Steria Group SA, Tata Consultancy Services Ltd., Temenos AG, The Goldman Sachs Group Inc., Unisys Corp., Virtusa Corp., Wipro Ltd., ZKAPITOL Technologies Ltd., and Nucleus Software Exports Ltd. |
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Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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