; Core Banking Software Market Size, Share, Trend 2034.

Core Banking Software Market

Core Banking Software Market Size, Share, and Analysis, By Solution (Deposits, Loans, Enterprise Customer Solution, Others), By Service (Professional Service and Managed Service), By Deployment (Cloud, On-premise, SaaS/Hosted, and Licensed), By Banking Type (Large Banks, Midsize Bank, Small Banks, Community Banks, Others), By End-User (Financial Institutions, Retail Banking, Treasury, Corporate Banking, Others), and By Region (North America, Europe, Asia-Pacific, And Rest of the World) And Regional Forecast 2024-2034

Published on: Feb-2024
Report Code: FG ICT 01868
No. of Pages: 170-350
Report Format: PDF

Core Banking Software Market is anticipated to exhibit a Compound Annual Growth Rate (CAGR) of 14.4% during the forecast span from 2024 to 2034. In 2023, the market size was assessed at USD 14 billion and is projected to reach USD 61.6 billion by the completion of 2034.

Product Overview

Core banking software is the foundation of a bank's operations, which assist in handling critical services including deposits, withdrawals, loans, and transfers. It functions as a centralized system that combines modules for customer information, accounts, loans, and transaction processing. This unified platform facilitates real-time processing and ensures accuracy, along with efficiency in financial transactions. Beyond transactional capabilities, core banking software provides customer relationship management, compliance management, and reporting tools, which enhance efficiency and customer service in the banking sector. Additionally, the security procedures are strict, that ensures data integrity and confidentiality. Therefore, core banking software acts as the foundation of modern banking, which allows institutions to fulfill the changing needs of clients in a developing financial world.

Market Highlights

Core Banking Software Market is expected to grow at a compound annual growth rate (CAGR) of 14.4% from 2024 to 2034

Core Banking Software Market is projected to reach USD 61.6 billion over the forecast period, owing to the increasing digitization of banking operations and the need for simplified efficiency. This expansion of the core banking software market is attributed to factors such as rising demand for integrated banking solutions, along with strict regulatory compliance mandates. Moreover, industry players are heavily investing in research and development endeavours to innovate and improve their product offering, thereby prioritizing security and customer satisfaction. The introduction of cloud-based solutions and the integration of advanced technologies like artificial intelligence and blockchain are reshaping the landscape of banking software. Consequently, the core banking software market will experience sustained growth due to the growing emphasis on customer-centric banking services and the vast adoption of mobile banking platforms in regions undergoing digital transformation in their financial sectors.

Source: Fatpos Global

Core Banking Software Market Segmentation

Professional Service segment will dominate owing to its growing demand for comprehensive financial support

By Service, the Core Banking Software Market is divided into Professional Service and Managed Service. The professional services segment will likely dominate the core banking software market due to rising need for complete support throughout the software deployment cycle, which includes project management, integration, scoping, and consulting. This requirement pushes companies to seek expert assistance in navigating difficult implementation operations. Professional service providers offer accessible support and resources to small & medium-sized enterprises (SMEs) at affordable costs, which makes their services highly appealing. This affordability encourages SMEs to invest in professional services to improve their core banking software solutions. The professional services sector benefits from the continuous evolution of banking technologies and regulatory requirements, which demands constant support and consultation. Thus, the professional services segment is will continue to display steady growth in revenue and market share throughout the forecast period.

On-Premise segment will lead due to the need for full control over operations and security risks

Based on Deployment, the Core Banking Software Market is segmented into Cloud, On-premise, SaaS/Hosted, and Licensed. The on-premise deployment segment is expected to lead the global core banking software market, as many firms prefer on-premise solutions since they want complete control over integration operations and assume responsibility for controlling IT-related and security risks. Companies using legacy systems frequently collaborate with IT specialists to ensure smooth data recovery while low safety and operating expenses. Moreover, certain organizations prioritize on-premise deployments to comply with regulatory requirements or to address data sensitivity concerns. Furthermore, despite rising popularity of cloud-based solutions, the on-premise segment will continue to thrive among enterprises that has well established infrastructure and strict security protocols.

Source: Fatpos Global

Market Dynamics

Growth Drivers

Digital Transformation will Generate Growth Opportunities

Digital transformation in the banking sector serves as an essential growth factor for the core banking software market. Consumers are increasingly favoring digital channels for banking, due to which financial institutions are pressured to update their infrastructure to meet evolving demands. Moreover, core banking software plays a major role in this transformation by facilitating the digitization of operations and providing smooth online and mobile banking experiences that enable faster transaction. Furthermore, core banking software is becoming extremely significant for banks that are looking forward to remain competitive and adaptable in the digital era of fintech advancement. This reliance on technology ensures client satisfaction and improves the ability of banks to navigate evolving market ecosystem and regulatory frameworks successfully.

Rising Banking Services in Emerging Markets will Lead to Market Expansion

Expansion of banking services in emerging markets provides promising growth prospects for core banking software providers . The need for contemporary banking infrastructure is growing in these markets due to economic development and efforts to improve financial inclusion. Core banking software allow financial institutions to build scalable and efficient operations that meet the needs of people while capturing market share. Improvements such as mobile banking and digital payments provide access to banking services in remote areas. Thus, targeting emerging markets enables core banking software providers to access untapped customer bases and encourage significant revenue growth. This strategic focus expands their market reach and contributes to the goal of financial inclusion and economic development in these regions.

Restraints

Difficulties with Implementation may Impede the Expansion of the Industry

Implementation of core banking software provides major challenges that can hinder the market expansion. Integrating with existing systems, along with moving data and educating people are significant challenges for banks. Legacy systems and modern infrastructures can create compatibility issues, which results in delays and cost overruns. Additionally, transitioning to new software can interrupt banking operations and potentially result in revenue loss. Moreover, ensuring regulatory compliance and data security further complicates the implementation process. These obstacles can deter some banks from adopting banking software solutions which can significantly affect the growth of the market. Therefore, overcoming these challenges requires careful planning, coordination, and resource allocation.

Recent Developments

  • In October 2023, Fiserv acquired Global Relay. This acquisition strengthens Fiserv's client onboarding and communication capabilities.
  • Temenos launched Temenos Infinity in November 2023: This cloud-native core banking platform is designed for scalability and open banking compliance.
  • Infosys Finacle launched Finacle Open 360 in September 2023: This platform connects banks to fintechs and developers, fostering open banking initiatives.
  • Oracle Financial Services Software Limited announced the upcoming release of Oracle Banking Platform 18C, emphasizing cloud advancements and AI integration.
  • Tata Consultancy Services TCS showcased its BaNCS core banking platform with enhanced customer engagement features and data analytics capabilities.

Core Banking Software Market

Key Players:

Regional Analysis

Core Banking Software Market is segmented based on regional analysis into five key regions: North America, Latin America, Europe, Asia Pacific and the Middle East and Africa. The Asia-Pacific region is expected to lead the core banking software market due to the vast adoption of mobile and web-based banking applications across the region, which significantly contributes to market growth. Additionally, many banks in Asia-Pacific are actively pursuing the implementation of core banking systems to manage large transaction volumes and ensure uninterrupted banking services to their customers. Moreover, the resilient economies of countries like India and China play an essential role in driving the adoption of core banking software solutions as financial institutions strive to modernize their infrastructure to match the rising demands. Therefore, with this proactive stance towards embracing digital transformation, Asia-Pacific emerges as a major player in the global core banking software arena.

Concurrently, North America will emerge as the second-largest core banking software market, owing to prominent banks that adopt modern core banking software and small to medium-sized enterprises utilizing these solutions for fund management. The growing scale of businesses and the wide range of applications for these solutions are pushing the adoption of core banking software in the North American region. Furthermore, there is a significant increase in demand for next-generation cloud-based core banking systems, which highlights the shift toward advanced technological solutions in the banking sector across North America.

Source: Fatpos Global

Impact of Covid-19 on Core Banking Software Market

COVID-19 pandemic had a profound impact on the core banking software market, as it presented challenges as well as opportunities. Initially, it disrupted the market dynamics by causing economic uncertainties, coupled with low business activities and supply chain disruptions, which lead to delays in software implementation projects. Many banks redirected their focus towards crisis management and adjusted to remote work setups, which further slowed down investments in new technologies. However, the pandemic also acted as a catalyst for digital transformation in the banking sector. Physical branches faced closures or operated under restrictions, due to which there was a surge in demand for digital banking solutions. This rapid digitization, combined with regulatory changes and remote banking, fueled market growth as banks focused on expenditures in updating their infrastructure to adapt to the scenario.

Core Banking Software Market is further segmented by region into:

  • North America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United States and Canada
  • Latin America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – Mexico, Argentina, Brazil, and Rest of Latin America
  • Europe Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United Kingdom, France, Germany, Italy, Spain, Belgium, Hungary, Luxembourg, Netherlands, Poland, NORDIC, Russia, Turkey, and Rest of Europe
  • Asia Pacific Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – India, China, South Korea, Japan, Malaysia, Indonesia, New Zealand, Australia, and Rest of APAC
  • Middle East and Africa Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – North Africa, Israel, GCC, South Africa, and Rest of MENA

Core Banking Software Market Scope and Segments:

ATTRIBUTE

  DETAILS

Study Period

2018-2034

Base Year

2023

Forecast Period

2024-2034

Historical Period

2019-2022

Growth Rate

CAGR of 14.4% from 2024-2034

Unit

Value (USD Billion)

Segmentation

Main Segments List

By Solution

  • Deposits
  • Loans
  • Enterprise Customer Solution
  • Others

By Service

  • Professional Service
  • Managed Service

By Deployment

  • Cloud
  • On-premise
  • SaaS/Hosted
  • Licensed

By Banking Type

  • Large Banks
  • Midsize Bank
  • Small Banks
  • Community Banks
  • Others

By End-User

  • Financial Institutions
  • Retail Banking
  • Treasury
  • Corporate Banking
  • Others

By Region

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • U.K.
    • France
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • Australia
    • Southeast Asia
    • Rest of Asia Pacific
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America
  • Middle East & Africa
    • GCC
    • South Africa
    • Rest of Middle East & Africa

Frequently Asked Questions (FAQ):

Core Banking Software Market size was values at USD 14 billion in 2023 and is projected to reach the value of USD 61.6 billion in 2034, exhibiting a CAGR of 14.4% during the forecast period.

The core banking software market refers to the industry that provides software solutions essential for managing a bank's core operations, including transactions, accounts, loans, and customer relationships.

The Professional Service and the On-Premise segment accounted for the largest Core Banking Software Market share.

Key players in the Core Banking Software Market include Fiserv, Inc., FIS Global, Temenos AG, Infosys Finacle, Oracle Financial Services Software Limited, Tata Consultancy Services (TCS), NCR Corporation, Jack Henry & Associates, Inc., Finastra, SAP SE, ACI Worldwide, CGI Inc., Sopra Banking Software, SIBS, Intellect Design Arena Ltd.., and Other Prominent Players.

Digital transformation and rising banking services in emerging markets are the factors driving the core banking software market.

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