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The financial analytics market size is estimated to grow by USD 8.08 billion, at a CAGR of 12.7% between 2023 and 2028. The market is experiencing a high demand for risk management tools, driven by the need for comprehensive risk mitigation strategies. Collaborations and partnerships among companies are on the rise, facilitating the development of more integrated and efficient solutions. Additionally, there is an increased demand for real-time analytics capabilities, as organizations seek to extract valuable insights from their data in a timely manner. These trends are shaping the market landscape and driving innovation in the industry. As businesses navigate increasingly complex and dynamic environments, the demand for robust risk management tools continues to grow. Collaborations and partnerships among companies enable the pooling of resources and expertise, leading to the development of more sophisticated solutions. Moreover, the increasing need for real-time analytics underscores the importance of agile decision-making in today's competitive landscape.
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The market share growth by the solution segment will be significant during the forecast period. These 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. These solutions can help organizations ensure that they comply with these regulations and avoid penalties. These 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 these 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 these 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 these 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 extract meaningful insights from big data, improve operational efficiency, and maintain a competitive edge over their rivals.
In addition, the demand for these 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 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 market is witnessing a surge in demand from Chief Financial Officers (CFOs) seeking to enhance their decision-making processes. With a focus on ESG-based databases and predictive analytics, CFOs are aligning IT investment plans with strategic goals. Ensuring data security and compliance with audit regulations, these solutions are pivotal in revenues management and budgeting cycles. They support digital transformation by analyzing customer behavior for an omni-channel experience. Resource utilization and financial efficiency are optimized through operational KPIs. In the BFSI sector, data quality management and technological innovations drive value chain optimization, while healthcare expenditure benefits from insightful trade regulations and import-export analysis.
High demand for risk management tools is notably driving the market growth. These 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 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. This includes predictive analytics, data-driven decision-making, data security, data integration, advanced analytics solutions, and financial steering.
Moreover, they comprise 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. These 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, these 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 is expected to continue to rise, which will have a positive impact on the growth of the 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 these tools in organizations. Big data and artificial intelligence can 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 market during the forecast period.
The 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 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.
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 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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The importance of audit and compliance regulations is growing, especially in industries like Banking and Financial Services (BFSI) and energy & power, where adherence to strict rules is essential. Expenses management and wealth management are key components of successful portfolio management, providing businesses with the tools to keep track of their spending and investments, leading to improved product profitability and customer profitability. Customer satisfaction has become a critical factor, driving companies to adopt an omni-channel customer experience model. This approach integrates multiple touchpoints, improving customer engagement and retention in retail and consumer goods industries. Operational Key Performance Indicators (KPIs) are used to monitor business performance, helping companies streamline their planning and budgeting cycles and evaluate their business performance.
Further, digital transformation initiatives are reshaping sectors like IT & telecom and automotive and manufacturing, leading to new opportunities for small and medium-sized enterprises (SMEs) and large enterprises. This transformation involves adopting cloud-based financial analytics solutions and advanced technologies like machine learning, which support enhanced investment decision-making processes and regulatory compliance frameworks. In the Banking, Financial Services, and Insurance (BFSI) sector, these changes are critical for portfolio management processes and for adapting to evolving regulatory environments. As businesses focus on investment and profits, they must ensure they align with compliance rules and maintain sound financial management practices to stay competitive and foster growth.
Market Scope |
|
Report Coverage |
Details |
Page number |
167 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 12.7% |
Market Growth 2024-2028 |
USD 8.08 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
12.05 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 34% |
Key countries |
US, China, India, UK, and Germany |
Competitive landscape |
Leading Companies, market forecast, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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. |
Market dynamics |
Parent market 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, Market condition analysis for the forecast period. |
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 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
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