Core banking software is a back-end technology that processes banking transactions throughout various branches of banks. Deposit, loan, and credit processing are all part of the system. Its services include opening new accounts, servicing loans, calculating interest, processing deposits and withdrawals, and customer relationship management. It always reduces operational expenses significantly, which requires fewer people for execution. It also allows for more customer accountability. Platforms based on software applications make basic banking systems more user-friendly and efficient. The advantages of core banking systems are numerous, including keeping up with a rapidly changing market, streamlining banking operations and making them more convenient for consumers, and increasing banks' reach to remote locations.
One of the key drivers of the core banking software market is the rise in adoption of cloud-based solutions offered by core banking software providers such as Finastra, FIS, Temenos AG, and others. Furthermore, core banking platforms increase operational efficiency by reducing the time it takes to connect with multiple branches. As a result, banks can process transactions faster, regardless of the client’s physical location, thus driving the market growth. In addition, 24/7 access to banking services and improved security provided by the core banking software have accelerated the market growth. Access to 24-hour banking services is essential in the era of contactless payments. Users can conduct financial transactions at any time and from any location as the core banking platform never goes offline. Customers can also call customer service at any time for assistance. Thus, 24/7 access to banking services propels the growth of the core banking software market. However, privacy concerns associated with banking systems and low flexibility and insufficient scalability are some of the factors that hamper the core banking software market growth. However, integration of technologies such as artificial intelligence (AI), big data, and the cloud in the banking industry is expected to provide lucrative growth opportunities to the core banking software market in the upcoming years.
The core banking software market is segmented into component, deployment model, end user, and region. By component, the market is differentiated into solution and service. Depending on deployment model, it is fragmented into on-premise and cloud. By end user, the market is divided into banks, financial institutions, and others. Region-wise, the market is segmented into North America, Europe, Asia-Pacific, and LAMEA.
The key players operating in the core banking software market include Capgemini, Finastra, FIS, Fiserv, Inc., HCL Technologies Limited, Infosys Limited, Jack Henry & Associates, Inc., Oracle, Temenos, and Unisys. These players have adopted various strategies to increase their market penetration and strengthen their position in the core banking software industry.
One of the key drivers of the core banking software market is the rise in adoption of cloud-based solutions offered by core banking software providers such as Finastra, FIS, Temenos AG, and others. Furthermore, core banking platforms increase operational efficiency by reducing the time it takes to connect with multiple branches. As a result, banks can process transactions faster, regardless of the client’s physical location, thus driving the market growth. In addition, 24/7 access to banking services and improved security provided by the core banking software have accelerated the market growth. Access to 24-hour banking services is essential in the era of contactless payments. Users can conduct financial transactions at any time and from any location as the core banking platform never goes offline. Customers can also call customer service at any time for assistance. Thus, 24/7 access to banking services propels the growth of the core banking software market. However, privacy concerns associated with banking systems and low flexibility and insufficient scalability are some of the factors that hamper the core banking software market growth. However, integration of technologies such as artificial intelligence (AI), big data, and the cloud in the banking industry is expected to provide lucrative growth opportunities to the core banking software market in the upcoming years.
The core banking software market is segmented into component, deployment model, end user, and region. By component, the market is differentiated into solution and service. Depending on deployment model, it is fragmented into on-premise and cloud. By end user, the market is divided into banks, financial institutions, and others. Region-wise, the market is segmented into North America, Europe, Asia-Pacific, and LAMEA.
The key players operating in the core banking software market include Capgemini, Finastra, FIS, Fiserv, Inc., HCL Technologies Limited, Infosys Limited, Jack Henry & Associates, Inc., Oracle, Temenos, and Unisys. These players have adopted various strategies to increase their market penetration and strengthen their position in the core banking software industry.
Key Benefits for Stakeholders
- The study provides an in-depth analysis of the core banking software market along with current trends and future estimations to illustrate the imminent investment pockets.
- Information about key drivers, restrains, & opportunities and their impact analysis on the core banking software market size are provided in the report.
- The Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the industry.
- The quantitative analysis of the core banking software market from 2022 to 2032 is provided to determine the market potential.
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Key Market Segments
By Component
- Solution
- Service
By Deployment Model
- On-premise
- Cloud
By End User
- Banks
- Financial Institutions
- Others
By Region
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Rest of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa
Key Market Players
- Capgemini SE
- Oracle Corporation
- Unisys
- Finastra
- Fiserv, Inc.
- Jack Henry & Associates, Inc.
- Infosys Limited
- FIS
- Temenos AG
- HCL Technologies Limited
Table of Contents
CHAPTER 1: INTRODUCTION
CHAPTER 2: EXECUTIVE SUMMARY
CHAPTER 3: MARKET OVERVIEW
CHAPTER 4: CORE BANKING SOFTWARE MARKET, BY COMPONENT
CHAPTER 5: CORE BANKING SOFTWARE MARKET, BY DEPLOYMENT MODEL
CHAPTER 6: CORE BANKING SOFTWARE MARKET, BY END USER
CHAPTER 7: CORE BANKING SOFTWARE MARKET, BY REGION
CHAPTER 8: COMPETITIVE LANDSCAPE
CHAPTER 9: COMPANY PROFILES
List of Tables
List of Figures
Executive Summary
According to this report, the core banking software market was valued at $10.2 billion in 2022, and is estimated to reach $49.7 billion by 2032, growing at a CAGR of 17.6% from 2023 to 2032.The core banking software market is likely to experience a significant growth rate of 17.6% from 2022-2032 owing to the increase in adoption of cloud-based solutions and integration of artificial intelligence in banking systems
Core banking software handles the processing and accounting of financial transactions, simplifying the banking procedures and processes for its different applications. Its solutions include deposits, loans, payments, and others, which are made accessible to customers. The core banking system uses information and communication technology to simplify banking procedures and processes for its various applications. Moreover, the banking industry benefited immensely with the advent of core banking, which offers excellent support in daily business. It minimizes manual tasks, saving time and money; increases the efficiency and productivity of employees; and simplifies the assessment, management, and upgrading of data.
Furthermore, with strong competition in the banking sector, new-age banks are utilizing core banking software and gaining a huge market share by targeting lucrative niches in the value chain. According to McKinsey research, more than 65% of banks are exploring the potential of next-generation core banking platforms, with 70% actively examining their core banking systems. As a result, more core banking providers are working on improving their products to deliver innovative, and tailored solutions.
The market also offers growth opportunities to the key players in the market. Key players are adopting strategies to strengthen their market positions in the core banking software industry, including new technology adoption, product developments, mergers and acquisitions, joint ventures, alliances, and partnerships. For instance, in February 2022, Fiserv, Inc., a leading global provider of payments and financial services technology, signed a definitive agreement to acquire Finxact, Inc., developer of the cloud-native banking solution that is powering digital transformation throughout the financial services sector. The transaction advances the Fiserv digital banking strategy, expanding the company’s leading account processing, digital, and payments solutions, and positioning Fiserv as the partner of choice for clients looking to scale, accelerate, and expand the digital banking experiences they deliver to their customers.
The core banking software market is segmented into component, deployment mode, end user, and region. By component, the market is differentiated into solution and service. Depending on deployment model, it is fragmented into on-premise and cloud. By end user, the market is divided into banks, financial institutions, and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. Region wise, it is analyzed across North America (the U. S., and Canada), Europe (UK, Germany, France, Italy, Spain, Netherlands, and rest of Europe), Asia-Pacific (China, Japan, India, Australia, South Korea, and rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).
The key players profiled in the study are Capgemini, Finastra, FIS, Fiserv, Inc., HCL Technologies Limited, Infosys Limited, Jack Henry & Associates, Inc., Oracle, Temenos, and Unisys. The players in the market have been actively engaged in the adoption of various strategies such as business expansion, product launch, collaboration, and partnership to remain competitive and gain an advantage over the competitors in the market. For instance, in January 2023, Temenos expanded its Banking-as-a-Service (BaaS) capabilities on Temenos Banking Cloud to meet the technology needs of organizations offering BaaS from licensed banks to specialist BaaS providers servicing brands or fintechs. With Temenos Banking Cloud incumbent and non-incumbent banks as well as BaaS providers can establish and scale their BaaS programs fast with minimal effort thus opening new revenue streams.
Key Market Insights
By component, the solution segment was the highest revenue contributor to the market and is estimated to reach $31.23 billion by 2032, with a CAGR of 16.5%. However, the service segment is estimated to be the fastest-growing segment with a CAGR of 19.6% during the forecast period.By deployment model, the on-premise segment was the highest revenue contributor to the market, and is estimated to reach $22.20 billion by 2032, with a CAGR of 13.9%. However, the cloud segment is estimated to be the fastest-growing segment with a CAGR of 21.7% during the forecast period.
By end user, the banks segment was the highest revenue contributor to the market, and is estimated to reach $24.02 billion by 2032, with a CAGR of 14.5%. However, the financial institutions segment is estimated to be the fastest-growing segment with a CAGR of 21.8% during the forecast period.
Based on region, North America was the highest revenue contributor, accounting for $3.78 billion in 2022, and is estimated to reach $14.80 billion by 2032, with a CAGR of 14.9%. However, Asia-Pacific is estimated to be the fastest-growing region with a CAGR of 21.4% during the forecast period.
Companies Mentioned
- Capgemini SE
- Oracle Corporation
- Unisys
- Finastra
- Fiserv, Inc.
- Jack Henry & Associates, Inc.
- Infosys Limited
- FIS
- Temenos AG
- HCL Technologies Limited
Methodology
The analyst offers exhaustive research and analysis based on a wide variety of factual inputs, which largely include interviews with industry participants, reliable statistics, and regional intelligence. The in-house industry experts play an instrumental role in designing analytic tools and models, tailored to the requirements of a particular industry segment. The primary research efforts include reaching out participants through mail, tele-conversations, referrals, professional networks, and face-to-face interactions.
They are also in professional corporate relations with various companies that allow them greater flexibility for reaching out to industry participants and commentators for interviews and discussions.
They also refer to a broad array of industry sources for their secondary research, which typically include; however, not limited to:
- Company SEC filings, annual reports, company websites, broker & financial reports, and investor presentations for competitive scenario and shape of the industry
- Scientific and technical writings for product information and related preemptions
- Regional government and statistical databases for macro analysis
- Authentic news articles and other related releases for market evaluation
- Internal and external proprietary databases, key market indicators, and relevant press releases for market estimates and forecast
Furthermore, the accuracy of the data will be analyzed and validated by conducting additional primaries with various industry experts and KOLs. They also provide robust post-sales support to clients.
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