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The financial analytics market size is estimated to grow at a CAGR of 12.7% between 2023 and 2028. The market size is forecast to increase by USD 8.08 billion.
The research report on the financial analytics market offers industry forecasts and segmentation based on component including both solution and services. It also segments the market by deployment, which comprises both on-premises and cloud. Geographically, the report covers North America, Europe, APAC, South America, and the Middle East and Africa. The market size, historical data (2018-2022), and future forecasts are presented in terms of value (in USD billion) for all these mentioned segments.
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Financial analytics is the process of using data analysis and mathematical models to evaluate financial data and make predictions, leading to informed financial decision-making. This practice involves the examination of various financial information, including historical and current financial data, to gain insights into an organization or individual financial health and performance.The growth of the market depends on several factors, including high demand for risk management tools, collaborations and partnerships among vendors and increased demand for real-time analytics.
High demand for risk management tools is notably driving the market growth. Financial analytics tools are essential for assessing and managing various forms of financial risks, including credit risks, market risks, operational risks, and more. They help organizations identify potential risks and take proactive measures to mitigate them. The business environment has become highly complex, with organizations facing a wide range of risks, including financial, operational, cybersecurity, regulatory, and geopolitical risks. Risk management tools, such as financial analytics tools, help identify, assess, and manage these multifaceted risks. Financial markets are prone to a high level of volatility, and market risk analysis is crucial before making investing and trading decisions.
Moreover, financial analytics comprises a versatile set of tools and techniques that contribute to effective risk management in various aspects of business and finance. By leveraging data analysis, statistical modelling, and predictive capabilities, organizations can proactively identify and manage financial risks, optimize decision-making, and enhance overall risk management strategies.
The exponential rise in data generation is an emerging trend shaping the market growth. The exponential growth in the data volumes generated by businesses, financial institutions, and individuals has created a need for advanced analytics tools to process and derive insights from this vast amount of information. Financial analytics solutions help organizations make sense of both structured and unstructured data. The digital age has resulted in an explosion of data, including structured and unstructured financial data. Handling and making sense of this immense amount of data that is generated requires advanced analytics tools that can process and analyze diverse data sources.
However, financial analytics tools are integral to managing, analyzing, and deriving valuable insights from the data that is generated, enabling organizations to adapt to changing market conditions quickly, reduce risks, and make more informed financial decisions. As data continues to grow in terms of both volume and complexity, the demand for financial analytics tools is expected to continue to rise, which will have a positive impact on the growth of the financial analytics market during the forecast period.
Data privacy and security concerns are significant challenges hindering market growth. Data privacy and security risks are major barriers to the adoption of financial analytics tools in organizations. Big data and artificial intelligence have the capability to track, retrieve, and analyze data from connected servers. These technologies can also manipulate the functioning of servers by altering their algorithms using artificial intelligence capabilities. Therefore, organizational data needs to be secured from unauthorized access to IT infrastructure. Also, IT infrastructure is based on many patchworks of open-source code, which can lead to flaws in systems. Cloud infrastructure is multi-tenant and, therefore, more vulnerable to such issues due to glitches in source codes, which can affect various applications running in the cloud environment.
In addition, the ease of procuring and accessing cloud services can also provide cyber hackers with the ability to scan, identify, and exploit loopholes and vulnerabilities within a system. In a multi-tenant cloud architecture, where multiple users are hosted on the same server, a hacker might try to break into the data of other users that are hosted and stored on the same server. Therefore, numerous organizations are sceptical about deploying financial analytics tools in their operations, which will limit the growth of the financial analytics market during the forecast period.
The market share growth by the solution segment will be significant during the forecast period. Financial analytics solutions are crucial for assessing and managing various types of financial risks, including credit risks, market risks, and operational risks. These analytical tools help organizations identify potential risks and take proactive measures to mitigate them.
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The solution segment was the largest and was valued at USD 3.57 billion in 2018. Financial institutions are subject to stringent regulations, such as Basel III, Dodd-Frank, and the General Data Protection Regulation (GDPR), which require robust data analytics and reporting capabilities. Financial analytics solutions can help organizations ensure that they comply with these regulations and avoid penalties. Financial analytics solutions enable companies to evaluate their financial performance, measure the key performance indicators (KPIs), and track their progress in reaching their financial goals. The growing demand for financial analytics solutions is driven by the need for better financial decision-making, risk management, and regulatory compliance in an increasingly data-driven world. Such factors are fueling the segment growth which in turn driving market growth during the forecast period.
On-premises financial analytics solutions allow organizations to have complete control over their financial analytics infrastructure. They can tailor the financial analytics software to meet their specific needs, integrate it with their existing systems, and maintain it according to their IT policies. Businesses that deal with sensitive financial data, proprietary algorithms, or confidential customer information may prefer to keep their analytics processes on-premises to reduce the risk of data breaches and information leaks, which are associated with cloud-based solutions. Certain industries, such as defense or critical infrastructure, may have unique requirements that necessitate the use of on-premises financial analytics solutions to maintain the highest level of control and security. Such factors are fueling the segment growth which in turn driving market growth during the forecast period.
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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. The financial sector in North America is heavily regulated, and financial institutions must adhere to stringent reporting and compliance requirements. As a result, there is a continuous need for financial analytics solutions to ensure regulatory compliance, risk management, and fraud detection. North America is a hub for investment and asset management. Asset managers, hedge funds, and individual investors depend on financial analytics tools to optimize their portfolios, assess market trends, and make informed investment decisions. The region is at the forefront of technological advancements and generates vast amounts of data. Companies are increasingly turning to financial analytics to extract meaningful insights from big data, improve operational efficiency, and maintain a competitive edge over their rivals.
In addition, the demand for financial analytics solutions in North America is driven by a combination of industry-specific needs, stringent regulatory requirements, technological advancements, and the competitive nature of the business landscape in the region. As a result, the market for financial analytics solutions in North America is expected to continue to grow as organizations seek to harness the power of data to enhance their financial decision-making processes. Such factors are expected to drive the regional; market growth duiirng the market growth.
The outbreak of the COVID-19 pandemic created extreme market volatility in 2020, which, in turn, triggered heightened demand for real-time financial analytics However, with the introduction of COVID-19 vaccines and the widespread implementation of vaccination programs, businesses resumed their operations, and the market in the region recovered to some extent. Additionally, the pandemic highlighted the importance of risk management and portfolio diversification. Thus, financial analytics tools enabled professionals to provide risk-aware recommendations and strategies, ensuring that the financial plans of their clients were resilient in the face of the widespread market uncertainty created by the pandemic. Such factors are expected to drive the growth of the regional market during the forecast period.
The Financial Analytics Market report includes the adoption lifecycle of the market, 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 growth strategies.
Global Financial Analytics Market Customer Landscape
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.
BankTree Software Ltd. - The company offers financial analytics solutions for predictive analysis.
Databricks Inc. - The company offers financial analytics solutions such as BankTree Personal Finance Software.
Fair Isaac Corp. - The company offers financial analytics solutions such as EXL Transaction Insights Solution.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 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 financial analytics market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2022.
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Financial Analytics Market Scope |
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Report Coverage |
Details |
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Page number |
167 |
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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 12.7% |
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Market Growth 2024-2028 |
USD 8.08 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
12.05 |
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Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
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Performing market contribution |
North America at 34% |
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Key countries |
US, China, India, UK, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
BankTree Software Ltd., Databricks Inc., ExlService Holdings Inc., Fair Isaac Corp., Fractal Analytics Pvt. Ltd., Genpact Ltd., H2O.ai Inc., Hitachi Ltd., International Business Machines Corp., Microsoft Corp., Oracle Corp., Perfios Software Solutions Pvt. Ltd., Quantiphi Inc., Ramp Business Corp., SAP SE, SAS Institute Inc., Teradata Corp., Wipro Ltd., Accenture Plc, and SparkCognition Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the 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. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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