Third-Party Banking Software Industry Market Overview
As per MRFR analysis, the Third-Party Banking Software Industry Market Size was estimated at 6.45 (USD Billion) in 2022.
The Third-Party Banking Software Industry Market Industry is expected to grow from 8.06(USD Billion) in 2023 to 60.1 (USD Billion) by 2032. The Third-Party Banking Software Industry Market CAGR (growth rate) is expected to be around 25.01% during the forecast period (2024 - 2032).
Key Third-Party Banking Software Industry Market Trends Highlighted
Due to the increasing competition in the banking industry, innovative solutions such as Third-Party banking software are required. This software enables banks to develop their digital offerings, streamline operations and cater to emerging tech-savvy customers. Banks are making use of these solutions to offer personalized financial services, automate routine tasks and gain instant feedback on customer interests.
The key market drivers include the increasing demand for digital banking services and the heightened need for better customer interaction. In addition, open banking regulations and the growing adoption of cloud-based solutions have opened doors for Third-Party banking software developers.
Recent developments comprise the incorporation of artificial intelligence and machine learning technologies for better client care as well as the detection of fraudulence. Additionally, embedded banking systems have also been witnessed, which connect banking with non-financial platforms seamlessly. These advancements will define the future of the Third-Party banking software industry, where banks look to create a seamless, innovative customer experience while navigating regulatory complexities and maintaining financial stability.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Third-Party Banking Software Industry Market Drivers
Increasing Demand for Digital Banking Services
Increasing acceptance of electrical banking services is one of the important catalysts driving growth in the global third-party banking software industry market. Currently, an increasing number of consumers are using online and mobile banking as banks strive to improve their digital offerings. This can help banks offer more convenient and user-friendly digital banking services via third-party banking software. By giving their customers, a better experience regarding online and mobile banking, banks have an opportunity to increase their level of customer satisfaction and, hence, loyalty.
The rising popularity of fintech companies is another factor that drives the growth of the third-party banking software industry. Fintechs make the financial services sector more innovative and cost-effective for its consumers, often partnering with banks to offer these services. As such, there is an emerging need for third-party banking software, which could be integrated into various fintech platforms.
Need for Compliance and Security
Another important factor accelerating the demand for third-party banking software is the advancement in regulatory compliance and security requirements for banks. Currently, banks must conform to a proliferating number of rules and regulations, including customer data maintenance, money laundering prevention measures, cyber security etc. All these tools can be found in third-party banking software, and they help banks comply with all these requirements by enabling them to manage risk.
In addition, there is an increased need for banking software due to the high frequency of cyber-attacks against banks, as it provides protection for their systems and data, too.
Focus on Customer Experience
Third-party banking software is gaining popularity due to the increased interest in customer experience. Banks are now more aware of the need to have a good client experience and are seeking strategies through which they can improve their customer service. Third-party banking software, however, has an answer as far as bank customers’ experiences are concerned. Moreover, there is a growing demand for third-party banking software due to the upswing in omnichannel banking, which allows banks to provide uniform client experiences across all channels.
Third-Party Banking Software Industry Market Segment Insights
Third-Party Banking Software Industry Market Deployment Type Insights
The Global Third-Party Banking Software Industry Market is expected to grow heavily in the next few years, with cloud-based deployment models and the requirement for smooth experiences being the prominent driving factors. Deployment types for the market are cloud-based and on-premises. At present, cloud-based deployment is popular because it is scalable, cheap, and offers a high degree of flexibility. Enterprises do not invest in infrastructure and investment software and hardware for this kind of deployment, and they can access software from anywhere as long as they have an internet connection.
On-premises deployment, the other type of deployment, on the other hand, provides a high level of control and security, although it tends to be quite expensive. In the Third-Party banking software industry market, cloud computing services have increased over time, which has been propelling the growth of the cloud-based deployment segment. The benefits experienced as a result of this type of deployment are a reduction in operating costs and improved scalability features with improved security measures, which are far more enhanced than on-premises deployment.
The on-premises deployment type, however, is also growing, if at the moment, at a lower rate, while still offering substantial utility since some banks are more assured of the need for enhanced control over the security features of the software. However, initial high cost and maintenance costs could act as a deterrent to most organizations. Overall, the deployment type for the market of Global Third-Party Banking Software Industry Market is steadily and highly growing, with cloud-based deployment gaining more and more prevalence.
Third-Party Banking Software Industry Market, by Deployment Type 2023 & 2032
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Third-Party Banking Software Industry Market Application Insights
The Global Third-Party Banking Software Industry Market segmentation by Application is expected to see significant growth in the coming years. The market share of the Core Banking segment is projected to be the largest by 2023, with over 30% of the Global Third-Party Banking Software Industry Market revenue. In this forecast period, we expect that this segment will continue its dominance due to the increasing utilization of core banking solutions by banks and financial institutions that are aimed at enhancing operational efficiency and customer service satisfaction.
The digital banking segment, too, is expected to record significant growth due to the rapid spread of online and mobile banking. The Payments segment is also a crucial part that will contribute largely to the growth of the Global Third-Party Banking Software Industry Market. This segment has been growing as a result of the increased use of digital payment solutions like mobile wallets and contactless payments. The wealth management sector, too, is seen growing exponentially as more people are looking for experts to manage their financial resources.
Another important area, risk management and compliance, will observe slow but sure growth driven by ever-increasing rules and regulations in today’s world, making it necessary for banks and other financial institutions to deal with risks associated with them effectively.
Third-Party Banking Software Industry Market End-User Vertical Insights
The Global Third-Party Banking Software Industry Market is segmented by End-User Vertical into Retail Banking, Corporate Banking, Investment Banking, Insurance, and Wealth Management. More than 40% of the total revenue accrued in the global third-party banking software industry market in the year 2023, thereafter followed by retail banking within these segments. The growth was because of retail customers who started transacting on digital platforms. During the forecast period, corporate banking is expected to be the fastest-growing segment and will have a CAGR of over 28%.
The growth of this segment has been driven by increasing demand for third-party banking software from corporate customers who want to improve their financial management. Over that duration, investment banking, insurance, and wealth management will also show some substantial increase since they need more productive and efficient ways to solve people’s problems in banks.
Third-Party Banking Software Industry Market Size of Financial Institution Insights
The size of the financial institution is a key factor in the adoption of Third-Party banking software. Small and Medium-Sized Enterprises (SMEs) are expected to drive the growth of the Global Third-Party Banking Software Industry Market during the forecast period, owing to the increasing need for efficient and cost-effective banking solutions. In 2023, the Global Third-Party Banking Software Industry Market for SMEs was valued at USD 2.5 billion and is projected to reach USD 12.5 billion by 2032, exhibiting a CAGR of 20.1%. Large Enterprises, on the other hand, are expected to hold a significant share of the market throughout the forecast period.
In 2023, the Global Third-Party Banking Software Industry Market for Large Enterprises was valued at USD 4.5 billion and is projected to reach USD 22.5 billion by 2032, exhibiting a CAGR of 22.1%. The adoption of Third-Party banking software by Large Enterprises is driven by the need for advanced features and functionalities, such as real-time data analytics, fraud detection, and risk management.
Third-Party Banking Software Industry Market Regional Insights
The Global Third-Party Banking Software Industry Market is segmented into North America, Europe, APAC, South America, and MEA. North America is the largest region in the market, accounting for over 40% of the global revenue in 2023. The region is home to a number of large banks and financial institutions, which are driving the demand for Third-Party banking software. Europe is the second-largest region in the market, accounting for over 30% of the global revenue in 2023. The region is home to a number of large banks and financial institutions, as well as a growing number of fintech companies.
APAC is the fastest-growing region in the market and is expected to grow at a CAGR of over 25% from 2024 to 2032. The region is home to a number of large banks and financial institutions, as well as a growing number of fintech companies. South America and MEA are smaller regions in the market but are expected to grow at a significant rate in the coming years.
Third-Party Banking Software Industry Market, by Region 2023 & 2032
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Third-Party Banking Software Industry Market Key Players And Competitive Insights
Major players in the third-party banking software industry are exploring strategic collaborations to expand their global presence and strengthen their product portfolio. Leading Third-Party Banking Software Industry Market players are focusing on developing innovative solutions to cater to the evolving needs of the banking and financial services industry.
Third-Party Banking Software Industry Market Industry is characterized by a competitive landscape with several established players and emerging startups. Key industry participants are investing in research and development to enhance their offerings and gain a competitive edge. Partnerships, acquisitions, and mergers are common strategies adopted by players to expand their market presence.
One of the leading third-party players in the banking software industry market is Temenos. The company provides a comprehensive suite of banking software solutions, including digital banking, core banking, and payment solutions. Temenos has a strong global presence with offices in over 60 countries and a customer base of over 3,000 banks worldwide. The company's focus on innovation and customer-centricity has enabled it to maintain its leadership position in the industry.
Another prominent player in the Third-Party Banking Software Industry Market is FIS. FIS offers a wide range of financial technology solutions, including banking software, payment processing, and risk management solutions. The company serves over 20,000 financial institutions worldwide. FIS has a strong track record of innovation and is known for its expertise in providing integrated technology solutions for the banking and financial services industry. The company's commitment to research and development has enabled it to develop cutting-edge solutions that address the evolving needs of its customers.
Key Companies in the Third-Party Banking Software Industry Market Include:
- Backbase
- Finastra
- Fiserv
- Thought Machine
- IBM
- Salesforce
- Azure
- SAP
- Infosys Finacle
- Microsoft
- Google Cloud
- AWS
- Oracle
- Mambu
- Temenos
Third-Party Banking Software Industry Market Industry Developments
The Third-Party Banking Software Industry Market is projected to reach USD 60.1 billion by 2032, exhibiting a CAGR of 25.01% during the forecast period (2024-2032). The increasing adoption of digital banking services, the need for improved customer experiences, and the growing regulatory compliance requirements are driving the market growth.
Key industry participants include Infosys, Temenos, Oracle, FIS, and SAP. Recent developments include the launch of new cloud-based banking software solutions, strategic partnerships between market players, and the growing adoption of artificial intelligence (AI) and machine learning (ML) technologies in banking software.
Third-Party Banking Software Industry Market Segmentation Insights
Third-Party Banking Software Industry Market Deployment Type Outlook
Third-Party Banking Software Industry Market Application Outlook
- Core Banking
- Digital Banking
- Payments
- Wealth Management
- Risk Management and Compliance
Third-Party Banking Software Industry Market End-User Vertical Outlook
- Retail Banking
- Corporate Banking
- Investment Banking
- Insurance
- Wealth Management
Third-Party Banking Software Industry Market Size of Financial Institution Outlook
- Small and Medium-Sized Enterprises (SMEs)
- Large Enterprises
Third-Party Banking Software Industry Market Regional Outlook
- North America
- Europe
- South America
- Asia Pacific
- Middle East and Africa
| Report Attribute/Metric |
Details |
| Market Size 2022 |
6.45(USD Billion) |
| Market Size 2023 |
8.06(USD Billion) |
| Market Size 2032 |
60.1(USD Billion) |
| Compound Annual Growth Rate (CAGR) |
25.01% (2024 - 2032) |
| Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year |
2023 |
| Market Forecast Period |
2024 - 2032 |
| Historical Data |
2019 - 2023 |
| Market Forecast Units |
USD Billion |
| Key Companies Profiled |
Backbase, Finastra, Fiserv, Thought Machine, Salesforce, IBM, Azure, SAP, Infosys Finacle, Microsoft, Google Cloud, AWS, Oracle, Mambu, Temenos |
| Segments Covered |
Deployment Type, Application, End-User Vertical, Size of Financial Institution, Regional |
| Key Market Opportunities |
Open Banking Adoption CloudBased Deployments API Integration Personalized Banking Experiences Enhanced Security Measures |
| Key Market Dynamics |
Growing adoption of open banking Rise of digital banking and mobile payments Need for enhanced customer experiences. Increasing regulatory compliance requirements Growing demand for personalized financial services |
| Countries Covered |
North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Third-Party Banking Software Industry Market is expected to reach USD 60.1 billion by 2032, growing at a CAGR of 25.01% from 2024 to 2032.
North America and Europe are expected to be the major regions driving the growth of the Third-Party Banking Software Industry Market. North America is expected to hold the largest market share due to the presence of a large number of financial institutions and technology providers.
Third-party banking Software is used for a variety of applications, including account aggregation, payment processing, and financial management. It can be used by businesses of all sizes to improve their financial operations.
Some of the key competitors in the Third-Party Banking Software Industry Market include FIS, Jack Henry & Associates, and Finastra. These companies offer a range of Third-Party Banking Software solutions to meet the needs of businesses of all sizes.
The key trends impacting the Third-Party Banking Software Industry Market include the rise of cloud computing, the increasing adoption of mobile banking, and the growing demand for real-time payments.
The challenges facing the Third-Party Banking Software Industry Market include the need for compliance with regulatory requirements, the risk of fraud and security breaches, and the need to integrate with legacy systems.
The future outlook for the Third-Party Banking Software Industry Market is positive. The market is expected to continue to grow as businesses of all sizes adopt Third-Party Banking Software to improve their financial operations.
The key factors driving the growth of the Third-Party Banking Software Industry Market include the increasing adoption of digital banking, the growing need for data analytics, and the increasing demand for personalized financial services.
The key opportunities for growth in the Third-Party Banking Software Industry Market include the expansion into new markets, the development of new products and services, and the formation of strategic partnerships.
The key challenges facing the Third-Party Banking Software Industry Market include the need to comply with regulatory requirements, the risk of fraud and security breaches, and the need to integrate with legacy systems.
