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The core banking software market size is forecast to increase by USD 32.94 billion at a CAGR of 24.4% between 2023 and 2028. The market's growth hinges on technological advancements, the rising demand for seamless customer experiences and personalized banking services, and regulatory compliance. Core banking software offers an all-inclusive, integrated system tailored for the banking sector, simplifying business operations and streamlining financial services. It enables banks to manage accounts, process deposits and loans, handle transactions, and generate reports efficiently. This software is crucial for modern banks seeking to adapt to evolving customer needs and regulatory standards. By providing a comprehensive solution, core banking software enhances operational efficiency, fosters customer satisfaction, and ensures compliance with industry regulations, thereby driving the growth of the banking sector.
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Core banking software like Temenos Transact, TCS BaNCS, and Flexcube is crucial for banking organizations to meet customer needs efficiently. It enables omnichannel banking access through online and mobile channels across multiple branches. Turnover times are reduced thanks to centralized systems and AI-integrated core banking solutions. As technology requirements evolve, integration architecture plays a vital role in managing transaction volumes seamlessly. The market is driven by the demand for advanced banking solutions, but challenges such as cybersecurity threats and regulatory compliance remain. Overall, the trend towards digital banking and innovative solutions is shaping the future of core banking software.
Technological advancements are driving growth in the software market. Digitalization and the use of digital banking solutions have been driving factors for the worldwide CBS market. Financial institutions require reliable CBS to support these digital revolutions since clients increasingly prefer digital channels for their banking needs. With CBS's seamless interaction with Digital Channels, customers can access banking services at any time and place of their choice.
However, it makes it easier and more convenient to manage online accounts, send money, pay bills, and complete other transactions. In addition, financial services institutions are able to reduce costs, streamline tasks and improve operational efficiency through the use of Digital Banking Technologies. CBS is being sought in high demand to satisfy consumer expectations and reap the benefits of digitization within the banking sector. Hence, increasing digitization and the adoption of digital banking solutions are expected to drive the growth of the market focus during the forecast period.
Cloud-based core banking solutions for scalability, cost-effectiveness, and enhanced flexibility are the primary trend in the market. One of the main trends in the CBS world market is to adopt cloud-based solutions. The benefits of cloud-based core banking systems for financial institutions are all about adaptability, cost efficiency, and greater flexibility. By doing away with on-premises infrastructure, these solutions lower hardware costs and let banks scale their operations effectively.
Additionally, cloud-based solutions offer more freedom in terms of accessibility to data and services from any location, enabling remote operations and enhancing collaboration. banks can streamline operations, cut costs, and react rapidly to shifting market demands due to the move toward cloud-based core banking technologies. Hence, cloud-based core banking solutions for scalability, cost-effectiveness, and enhanced flexibility are a trend that is expected to drive the growth of the market in focus during the forecast period.
The legacy system modernization and integration with existing infrastructure is a major challenge in a market. In terms of the modernization and integration of legacy systems, there are significant challenges for the global CBS industry. Several banks and other financial institutions still use sophisticated, rigid legacy systems that were never intended to suit the needs of modern banking. The modernization of legacy systems often requires high costs, drawn-up procedures, and the possibility of disruptions to operations.
Moreover, ensuring consistency of data, security, and the preservation of operational continuity while this transition takes place is an added complexity. Strategic planning, company contacts, and strong project management are essential for overcoming these obstacles and ensuring that the modernization and integration process is successfully carried out. Overall, legacy system modernization and integration with existing infrastructure are challenges that are expected to restrict the growth of the market during the forecast period.
The market report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Customer Landscape
The market share growth by the on-premise segment will be significant during the forecast period. For financial institutions in the global market for CBS over the period from 2023 deployment of on-premise systems has been the leading alternative. On-premise installations are still predominant due to particular market demands and regulatory requirements, such as the General Data Protection Regulation (GDPR) and Payment Card Industry Data Security Standard (PCI-DSS), despite the rising popularity of cloud-based solutions.
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The on-premise segments showed a gradual increase in the market share of USD 5.43 billion in 2018. In order to meet their requirements in a specific way, large banks and other organizations that have complex infrastructures can benefit from an on-location deployment that offers enhanced control, security, or flexibility. The concerns related to data protection and compliance are also part of the reason why organizations prefer on-premise solutions.
Based on end-user, the market has been segmented into banks and financial institutions. The banks segment will account for the largest share of this segment. It is anticipated that banks will remain the main end-user of CBS worldwide. In order to improve operational efficiency, streamline processes and offer individual customer experiences, the CBS has been adopted more frequently by banks. The necessity for real-time transaction processing, regulatory compliance requirements, and the rising need for integrated banking systems are some of the reasons driving the adoption of CBS on banks. The increasing use of digital banking services, as well as the expansion of open bank initiatives, has strengthened the need for NCBs between banks.
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North America is estimated to contribute 34% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In North America, the CBS market is growing and evolving significantly. Financial institutions are actively rolling out innovative core banking solutions with a view to improving operational efficiency, clients' experience, and legal compliance. There are few companies that provide thorough core banking platforms that meet a variety of banking requirements, including those for retail banking, business banking, and wealth management.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Fidelity National Information Services Inc. - The company offers cloud-based digital core banking software such as Universal Banking Platform Solutions.
Finastra - The company offers core banking software called CapitalBanker.
Fiserv Inc. - The company offers core banking software such as FIS ClearEdge and FIS Integrated Banking Solutions.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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Core banking software like FIS Profile plays a pivotal role in managing financial operations for banks and financial institutes globally. These platforms streamline payments, manage financial records, and optimize investments while integrating fintech technologies. With a focus on employee efficiency and customer satisfaction, they navigate the complex world of worldwide financial markets and fluctuating interest rates. Leveraging Big Data and Artificial Intelligence, core banking software provides advanced visualization capabilities and real-time insights. Security features ensure protection against cyber threats, enhancing trust in digital businesses. SaaS-based solutions offer a cost-efficient approach, catering to the needs of BFSI industries and promoting cloud adoption. From payment processing to internal processes and transaction monitoring, core banking software drives technological innovation and improves online banking service quality while ensuring regulatory compliance and data security.
Further, core banking software revolutionizes banking operations by providing comprehensive solutions for banking organizations. Platforms like Temenos Transact, TCS BaNCS, and Flexcube streamline processes, addressing turnover times and meeting evolving customer needs. These systems enable omnichannel banking access, facilitating online and mobile banking across multiple branches. With a centralized system, banks efficiently manage transaction volumes and adapt to changing technology requirements. Integration architecture ensures seamless connectivity across various banking functions. AI-integrated core banking solutions enhance operational efficiency and customer experiences. As banking firms embrace these advancements, core banking software emerges as a pivotal tool in driving innovation and competitiveness in the financial sector.
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Market Scope |
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Report Coverage |
Details |
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Page number |
164 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 24.4% |
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Market growth 2024-2028 |
USD 32.94 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
20.44 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 34% |
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Key countries |
US, China, Germany, UK, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Capgemini Service SAS, Capital Banking Solutions, Fidelity National Information Services Inc., Finastra, Fiserv Inc., HCL Technologies Ltd., Infosys Ltd., Intellect Design Arena Ltd., Mambu B.V., Nidec Corp., Nucleus Software Exports Ltd., Oracle Corp., SAP SE, SoFi Technologies Inc., Sopra Steria Group SA, Tata Consultancy Services Ltd., Temenos AG, Unisys Corp., Wipro Ltd., and ZKAPITOL Technologies Ltd. |
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Market dynamics |
Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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