Banking System Software Market Size, Share & Trends Analysis Report By Software, By Services, By Deployment, By Operating System, By Enterprise Size, By Application, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global banking system software market size was valued at USD 35.88 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 6.2% from 2023 to 2030. The increasing smartphone adoption and internet penetration have led to significant demand for banking system software. The rise of digital banking has made it possible for customers to manage their accounts and perform transactions from their mobile personal devices, driving demand for robust, secure, and innovative solutions that enhance customer experience.

Digital transformation is another major driver of the banking system software industry. Banks are looking for ways to modernize their operations and improve customer experience through the adoption of new technology. This includes the implementation of software solutions that can automate manual processes, reduce errors, and provide real-time data. Consequently, a growing demand for digital banking software solutions that can support the transformation of the banking industry has been observed in the market.

The rise of fintech has also had a significant impact on the banking system software market. Fintech companies are offering innovative software solutions that are changing the way people manage their finances. Banks are therefore looking for software solutions that can help them compete with fintech companies and keep up with the changing financial landscape. This has led to a growing demand for software solutions that can provide better customer experience and improved financial management.

Regulatory compliance is another key driver of the banking system software industry. Governments across the world have implemented strict regulations to ensure the security of customer data and the stability of the financial system. Banks are therefore required to invest in software solutions that meet these regulatory requirements, which has led to a growing demand for banking system software. Moreover, the banking industry is becoming increasingly competitive, driving the need for software solutions that can provide a competitive edge.

One major restraint for the growth of the banking system software industry is the high cost of software implementation and maintenance. Banks are required to invest a significant amount of money in the software solutions they use, and the cost of implementing and maintaining these solutions can be prohibitively high. This can make it difficult for banks to invest in the software solutions they need to stay competitive and meet regulatory requirements.

To overcome this restraint, banks can adopt a cost-effective approach to software implementation by carefully evaluating their software requirements and selecting cost-effective solutions that meet their specific needs. Moreover, banks can work with software vendors that offer flexible pricing models and provide ongoing support and maintenance services to ensure the smooth operation of their software solutions.

COVID-19 Impact Analysis

The COVID-19 pandemic has profoundly impacted the banking system software industry. The sudden shift to remote work and digital banking has accelerated the adoption of digital banking solutions, as banks scrambled to provide their customers with the ability to manage their finances from home. This has led to an increase in demand for robust and secure banking software that can support digital banking and simultaneously, provide a seamless customer experience. In addition, the pandemic has heightened concerns about security and fraud, driving the need for software solutions that can provide enhanced security measures to protect customer data and financial transactions.

Software Insights

The core banking system software segment dominated the market in 2022 and accounted for a revenue share of more than 44.0%. One of the major factors contributing to the growth of the segment is the ability of core banking system software to streamline and automate a range of banking processes. Core banking system software can provide banks with a centralized platform for managing their operations, enabling them to automate manual processes, reduce errors, and improve efficiency.

It can result in cost savings for banks and help them provide a better customer experience by enabling real-time data access and faster transaction processing. Integrating advanced technologies, such as artificial intelligence and blockchain, into core banking system software also provides new opportunities for innovation and growth. As a result, the adoption of core banking system software is increasing among financial institutions, driving the segment's growth.

The investment banking system software segment is anticipated to register significant growth during the forecast period. The growth is attributable to its ability to enhance investment banks' overall performance and competitiveness. Investment banking system software can provide investment banks with a comprehensive view of their operations, enabling them to make informed decisions and respond quickly to changing market conditions. This can help investment banks increase profitability and improve their risk management capabilities.

Services Insights

The professional services segment dominated the market in 2022 and accounted for a revenue share of more than 57.0%. The professional services segment of the banking system software market is growing due to increasing demand for specialized consulting and support services from banks. Banks are facing a growing need for expert support in the implementation and integration of banking system software into their existing systems and processes. Moreover, banks require ongoing support and maintenance services to ensure the smooth operation of their software solutions and to resolve any issues that may arise.

The managed services segment is anticipated to register significant growth over the forecast period. The segment is growing due to increasing demand for outsourced IT support and maintenance services from banks. Banks are looking for ways to reduce their IT costs and improve the efficiency of their operations. By outsourcing their IT support and maintenance needs to managed service providers, banks can take advantage of their expertise and experience to reduce their operational costs and improve their overall IT infrastructure.

Deployment Insights

The on-premise segment dominated the market in 2022 and accounted for a revenue share of over 58.0%. On-premise deployment is preferred due to the sensitive nature of banking data and the need for banks to maintain control over their IT infrastructure. With the on-premise deployment, banks can store their data and software on their servers, providing them with complete control over their data and the ability to ensure its security and privacy. Moreover, the on-premise deployment allows banks to customize their software solutions to meet their specific needs and requirements.

The cloud segment is projected to register the highest growth rate over the forecast period. The cloud deployment segment is growing due to its cost-effectiveness, scalability, and ease of use. With cloud deployment, banks can access software solutions and store their data on remote servers, reducing the need for on-premise hardware and IT support. This can result in lower upfront costs and lower ongoing IT costs for banks. In addition, cloud deployment enables banks to scale their IT resources up or down as needed, providing them with greater flexibility to meet changing business needs.

Operating System Insights

The android segment led the market in 2022 and accounted for a revenue share of more than 36.0%. Android is one of the world's most widely used operating systems, with a large and growing user base. As a result, Android is an attractive platform for software developers, providing them with a large potential customer base. Moreover, Android is an open-source platform, which means that software developers have access to a wealth of resources and tools that they can use to build and deploy software solutions. This makes it easier and more cost-effective for developers to create high-quality, feature-rich banking system software that runs on Android.

The windows segment is anticipated to register significant growth over the forecast period. The growing use of cloud computing is driving demand for Windows-based banking system software. Cloud computing provides customers with the ability to access their financial data from anywhere and on any device, and Windows is a popular platform for cloud-based financial solutions. Moreover, Windows provides robust security and privacy features, which are critical for the safe and secure operation of financial systems.

Enterprise Size Insights

The large enterprises segment led the market in 2022 and accounted for a revenue share of more than 63.0%. Large enterprises use banking system software to improve efficiency, enhance competitiveness, and comply with regulatory requirements. With the growing complexity of financial operations and increasing regulatory requirements, large enterprises are turning to bank system software to ensure that they can manage their financial operations promptly and efficiently. Moreover, banking system software can help large enterprises to improve their risk management capabilities, enabling them to identify and mitigate potential risks in real-time.

The small & medium enterprises segment is expected to register significant growth during the forecast period. One of the primary factors contributing to the growth of the segment is that banking system software can be customized to meet the specific needs of small & medium enterprises. Unlike large enterprises, which typically have complex financial operations and strict regulatory requirements, small & medium enterprises have more flexible and streamlined financial operations. Banking system software can be customized to meet the specific needs and requirements of such enterprises, providing them with the ability to quickly adapt to changing market conditions and business needs.

Application Insights

The transaction management segment dominated the market in 2022 and accounted for a global revenue share of over 24.0%. One of the major factors is that transaction management is a critical function for financial institutions, as it ensures the accuracy, security, and efficiency of financial transactions. Moreover, transaction management gives financial institutions real-time visibility and control over their transactions, enabling them to quickly and easily monitor and manage their financial operations. This helps financial institutions identify and resolve any transaction-related issues and make informed decisions about how to optimize their operations.

The investment management segment is anticipated to register the fastest growth during the forecast period. The increasing sophistication and complexity of investment portfolios have created a growing demand for advanced investment management solutions. These solutions provide financial institutions with the tools they need to manage large and diverse portfolios and make informed investment decisions. Moreover, technological advances, such as big data and artificial intelligence, have made it possible to automate many of the manual processes involved in investment management, resulting in increased efficiency and reduced risk.

Regional Insights

North America dominated the banking system software market in 2022 and accounted for a revenue share of more than 24.0%. The presence of a large number of leading banking software companies in the region, such as JPMorgan Chase, Bank of America, and Citigroup, has contributed to the regional market's growth. These companies have a significant demand for advanced banking system software solutions to streamline their operations and improve their competitiveness. Furthermore, a large and well-established IT industry in North America has contributed to the growth of the banking software solutions.

The Asia Pacific regional market is expected to emerge as the fastest-growing market during the forecast period. The regional market growth can be attributed to the rapidly growing economies in the region, such as China and India, leading to an increase in the demand for banking services, driving the growth of the banking system software industry. Furthermore, the growth of the financial sector in Asia Pacific has been driven by the increasing number of people entering the middle class, leading to a rise in disposable income and a higher demand for financial services. This has increased the need for advanced banking system software solutions to streamline operations and improve the customer experience.

Key Companies & Market Share Insights

Prominent banking software companies are aggressively investing in strategic initiatives, such as mergers and acquisitions, and partnerships to stay ahead of the competition and offer innovative solutions to their customers.  For instance, in July 2022, Temenos, a cloud-based platform, strengthened its partnership with Wipro to aid banks of various sizes to hasten their digital transformation and broaden their market approach in the U.K., U.S., and Australia. The collaboration merges Wipro's technical proficiency with Temenos' comprehensive banking solutions, enabling banks to take advantage of this opportunity to undertake substantial digital changes in both the front and back end. In addition, optimizing digital and transactional procedures will shorten the duration of the modernization process and enhance operational efficiency.

Vendors are focusing on offering advanced banking system software solutions to enhance the customers' experience across the world. In another instance, in September 2022, Goldman Sachs Transaction Banking, a software platform that assists businesses in modernizing money movement, Modern Treasury, announced a collaboration to accelerate the shift to embedded payments. The partnership aimed to help joint customers integrate and scale international and domestic payments into their products to drive market growth. Some prominent players in the global banking system software market include:

• Microsoft Corporation

• International Business Machines (IBM) Corporation

• Finastra

• Fidelity National Information Services, Inc.

• Fiserv, Inc.

• SAP SE

• Oracle Corporation

• Infosys Limited

• TATA Consultancy Services Limited

• Salesforce, Inc.

Banking System Software Market Report Scope

Global Banking System Software Market Segmentation

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global banking system software market report based on software, services, deployment, operating system, enterprise size, application, and region:

• Software Outlook (Revenue, USD Million, 2017 - 2030)

  • Core Banking System Software

  • Corporate Banking System Software

  • Investment Banking System Software

  • Others

• Services Outlook (Revenue, USD Million, 2017 - 2030)

  • Professional Services

  • Managed Services

• Deployment Outlook (Revenue, USD Million, 2017 - 2030)

  • On-premise

  • Cloud

• Operating System Outlook (Revenue, USD Million, 2017 - 2030)

  • Android

  • Windows

  • iOS

  • Others

• Enterprise Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Transaction Management

  • Credit and Lending

  • Risk & Compliance

  • Customer Relationship Management

  • Investment Management

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Spain

    • Italy

  • Asia Pacific

    • China

    • Japan

    • Hong Kong

    • India

    • South Korea

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • Saudi Arabia

    • UAE