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The core banking solution market is undergoing a comprehensive analysis, reflecting a transformative shift in the banking industry's technology landscape. This analysis encompasses a range of factors, including technological advancements, market dynamics, regulatory compliance, and evolving customer demands, all of which contribute to the growing prominence of core banking solutions as a critical enabler of digital transformation and innovation in banking operations. Technological advancements play a pivotal role in shaping the market analysis of core banking solutions.
The adoption of cloud-based core banking platforms, open banking APIs, and advanced analytics is reshaping the way banks manage customer data, process transactions, and deliver services. This technological progress addresses critical operational requirements, such as scalability, agility, and digital innovation, making core banking solutions increasingly essential for banks to achieve operational efficiency and meet evolving customer needs. Market dynamics, including competitive landscape, customer preferences, and industry trends, are also integral components of the core banking solution market analysis. The rise of digital banking, fintech disruption, and changing customer behaviors are driving banks to invest in modern core banking solutions that can deliver personalized, omnichannel experiences and real-time transaction processing.
This analysis involves evaluating market trends, customer expectations, and competitive positioning of core banking solutions, providing insights into the evolving market dynamics and strategic decision-making related to banking technology investments. Regulatory compliance and risk management are essential aspects influencing the market analysis of core banking solutions. The need for robust AML, KYC, and data privacy frameworks is shaping the market trends, as banks seek core banking solutions that offer comprehensive regulatory compliance features and risk management capabilities. This trend reflects a growing emphasis on governance, risk, and compliance within core banking systems, enabling banks to navigate complex regulatory landscapes more effectively and securely. Evolving customer demands and digital banking preferences are driving trends in the core banking solution market.
The demand for seamless digital services, personalized experiences, and real-time insights is shaping the customer-centric approach to core banking solutions. This analysis involves understanding the impact of changing customer expectations on market dynamics, product development, and strategic partnerships, providing insights into the evolving needs of banks and their customers in an increasingly digital banking environment.
The market analysis of core banking solutions encompasses a comprehensive evaluation of technological advancements, market dynamics, regulatory compliance, and evolving customer demands, reflecting a transformative shift in the banking industry's technology landscape. The convergence of these factors underscores the growing significance of core banking solutions as a critical enabler of digital transformation and innovation in banking operations, shaping the future of banking technology, customer experiences, and industry competitiveness.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Segment Outlook | Component, Deployment, Organization Size, End User and Region |
Core Banking Solutions Market Highlights:
Core Banking Solution Market Overview
Core Banking Solution Market Size was valued at USD 10,701.2 million in 2021. The Core Banking Solution market industry is projected to grow from USD 12,412.4 million in 2022 to USD 36,752.6 million by 2032, exhibiting a compound annual growth rate (CAGR) of 14.5% during the forecast period (2024 - 2032). Growing demand for improved customer experience and the growing need to manage banking operations from a centralized server are the key drivers fueling the growth of the market.
FIGURE 1: CORE BANKING SOLUTION MARKET 2018-2030
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Covid-19 Analysis
In response to the COVID‐19 pandemic, the World Health Organization (WHO) had recommended preventive measures to lessen close contact between human interaction and public gatherings. Subsequently, the pandemic forced banking sector turned to online in order to cater the customer’s remotely with safety measures. COVID-19 pandemic acted as the catalyst for the adoption of core banking solutions to efficiently manage the banking processes during the pandemic. During the pandemic, cloud-based solutions were on the peak demand. The COVID-19 pandemic created a new urgency for cloud solutions. With continued banking disruption, the traditional core architecture wasn’t enough to deliver new products and services at the required pace. In the post-pandemic world, the mindset of customer’s has also been changed and already adopted the online world as a more convenient way for the banking. These trends are continued and is expected to open significant demand for cloud-based core banking solutions during the projected period as well. The core banking solution providers are also integrating new technologies to grab the opportunity created after the pandemic.
Core Banking Solution Market Trends
Adoption of Advanced Technologies such as Cloud, Artificial Intelligence (AI), and Analytics
Many banks have accelerated the digital transformation by means of providing improved customer experience, expand product and services offerings, to comply constantly changing regulatory landscape. However, banks are seeking for the core banking solutions with less infrastructure costs. The adoption of cloud-based (Software as a Service) model is benefitting banks in many ways and the trend is keep continued. Infrastructure savings due to flexible pricing, expansion and agility on demand, and security and availability are the prime factors driving the adoption of cloud-based core banking solutions. Artificial Intelligence (AI) technology and analytics are also gaining significant traction among the banking sector. Over the past decade, the amount of structured and unstructured data available to banks has skyrocketed. With advances in cloud computing and machine learning technologies, artificial intelligence is shaping the prospects of banking and financial institutions. With the data history captured around Artificial Intelligence, core banks will be able to make more informed decisions on various functions, including back-office operations, customer experience, marketing, and product management.
Core Banking Solution Market Segment Insights
Core Banking Solution Component Insights
The core banking solution market segmentation, based on Component, Solution and Services. By solution, the core banking solutions market has been categorized as deposits, loans, enterprise customer solutions, account processing, and others. The solutions segment accounted for the largest market share as these 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.
January 2023, Tata Consultancy Services announced that CTBC Bank, Taiwan, has chosen TCS BaNCSTM for Banking and Wealth Management to digitally transform its company and drive future growth.
FIGURE 2: Core Banking MARKET SIZE BY COMPONENT 2021 VS 2030 (USD Million)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Core Banking Deployment Insights
Based on Deployment, the core banking solution market is segmented into On-premises and Cloud. The on-premises segment dominated the market in 2022 and accounted for XX shares of the revenue. When building an on-premises 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.
Core Banking Solution End User Insights
Based on the end user, the market has been segmented into banks and financial institutions. The banks segment dominated the market in 2022 in the core banking market. The huge improvements in information technology and the expanding internet network are responsible for the segment's rise. These technologies aid banks in minimizing manual labor and enhancing operational effectiveness. Multiple bank branches have the main banking software installed, and these branches are then linked together by computer networks based on satellite, phone, and internet connections. Core banking solutions are projected to be used by banks because of their advantages, such as greater efficiency and accessibility, decreased additional expenses, and increased system flexibility in the market.
January 2023, Tata Consultancy Services announced that CTBC Bank, Taiwan, has chosen TCS BaNCSTM for Banking and Wealth Management to digitally transform its company and drive future growth.
May 2022, Temenos have extended their relationship to run Temenos onboarding and origination solutions on AWS. The technology collaboration aims to allow all retail and commercial banks - incumbents and challengers - to provide digital onboarding and origination solutions with higher performance, scalability, and security. It will give banks greater agility while reducing time to market and improve cost efficiency. The two companies will go-to-market with solutions for retail, business, corporate and private banking, and wealth.
Core Banking Solution Regional Insights
By region, the study segments the market into North America, Europe, Asia-Pacific, the Middle East & Africa, and South America. North America is expected to hold the largest market share in 2021. The US is the biggest market for core banking solutions. The country has been attracting international investors because it has a higher number of financial institutions than any other country. The North American market is highly dominated by local players, resulting in significant entry barriers. However, witnessing huge growth in the region, foreign investors are getting increasingly inclined to enter the US market. Also, the core banking solutions have been widely deployed among medium & large sized banks with assets worth more than USD 1 billion.
Furthermore, the proliferation of vendors providing services to a large number of banks is fueling the growth of the Core Banking Solution market in North America. For instance, Technisys offers banking software, Cyberbank Core, which is designed to minimize operational and technology costs while increasing profits and customer satisfaction. Additionally, the country’s banking industry is becoming increasingly digitalized, and it is projected that by 2022, the US banks are likely to invest heavily in technology for banking.
FIGURE 3: Core Banking Solution MARKET SIZE BY REGION 2021 VS 2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Core Banking Solution Key Market Players & Competitive Insights
The market is characterized by stiff competition from well-known companies in this sector and is moderately fragmented. Some of the important strategies used by major competitors to ensure long-term survival in the market include joint ventures, partnership agreements, mergers and acquisitions, product developments, regional expansions, and an increased focus on R&D efforts.
Core banking solution suppliers are concentrating on creating financial products that are ready for use and have a competitive edge. Vendors are putting a lot of effort into utilizing customer input to enhance the functionality of their financial solutions and digital platforms. Vendors are providing solutions based on the clients' professional approach for banks and other financial institutions that are concerned about the constraints of their core architectural platforms. Some of the prominent players operating in the core banking software market are:
Key Companies in the Core Banking Solution market include.
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JAYAM SOLUTIONS PRIVATE LIMITED
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Capgemini SE
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Fiserv, Inc.
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Infosys Ltd
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Tata Consultancy Services Limited
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Oracle Financial Services Software Ltd
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Temenos AG
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Fidelity National Information Services Inc.
Core Banking Solution Industry Developments
September 2021 The latest offering from SAP SE (SAP) and the recently established business Dediq GmbH, SAP Fioneer, has begun to be made available to the financial services sector (FSI). Entrepreneurial investor Dediq GmBH concentrates on digital and information technology companies.
February 2022 The core banking software company Finxact, which offers cloud technology and open development tools for quicker IT updates and is well-liked by bank technology investors, has agreed to sell a stake to Finiserv for $650 million.
November 2021 Infosys Finacle, part of EdgeVerve Systems, a wholly-owned subsidiary of Infosys and IBM, announced that the Finacle Digital Banking Solution Suite will be available on Red Hat OpenShift and IBM Cloud for financial services. This collaboration will help banks scale business transformation, become more agile, and power their growth with an on-demand portfolio of products and services.
January 2020, Fidelity National Information Services has partnered with Union Bank, a member of MUFG Americas Holdings to deliver next-generation core banking solutions to the bank. Union Bank will use the FIS modern banking platform to drive innovation and address the evolving needs of its clients
Core Banking Solution Market Segmentation
Core Banking Solution Component Outlook
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Solutions
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Account Processing
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Deposit
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Loan
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Enterprise Customer solution
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Others
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Services
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Professional Services
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Managed Services
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Core Banking Solution Deployment Outlook
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On-Premises
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Cloud
Core Banking Solution Organization Size Outlook
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SMEs
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Large Enterprises
Core Banking Solution End Users Outlook
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Banks
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Financial Institutions
Core Banking Solution Regional Outlook
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North America
- US
- Canada
- Mexico
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Europe
- Germany
- France
- UK
- Rest of Europe
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Asia-Pacific
- China
- Japan
- India
- Rest of Asia-Pacific
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Middle East & Africa
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South America
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