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The financial service application market is estimated to grow at a CAGR of 7.85% between 2022 and 2027. The size of the market is forecast to increase by USD 54.72 billion. The growth of the market depends on several factors, including increasing government initiatives to digitalize the financial sector, the advantages of digital payment, and an increase in FinTech spending.
This report extensively covers market segmentation by end-user (large enterprise, small, and medium enterprise), deployment (on-premise and cloud-based), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Technavio categorizes the global financial service application market as a part of the global application software market within the global IT software market. The parent global application software market covers companies that are engaged in developing and producing application and system software. It also includes companies offering database management software. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The increasing government initiatives to digitalize the financial sector are notably driving the market growth, although factors such as privacy and security concerns may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Financial Service Application Market Driver
The increasing government initiatives to digitalize the financial sector are notably driving market growth. One of the key factors which are expected to boost the demand for financial service applications during the forecast period is the growing government commitment to digitize the financial industry. However, the threat of data breaches is always a major concern, which tends to drive the adoption of financial services applications across various enterprises.
Several nations across the world are making significant investments in digitalization to improve their work efficiency and flexibility across financial institutions. For instance, in July 2020, the National Bank of Canada corporate venture capital arm, NAventures, announced that it had invested USD 11 million in Flinks, a data company that enables businesses to connect their users with financial services, to support the company expansion in data connectivity and digitization in the financial services sector. Hence, these factors are expected to contribute to the growth of the market during the forecast period.
Significant Financial Service Application Market Trend
The rise in customer awareness about finance and digitization is an emerging trend in the market. Disruptions in the traditional banking system have made it necessary for financial institutions to retain customers by embracing digital technologies. The tech-savvy millennials are opting for various IoT platforms to execute day-to-day transactions. Financial services from Amazon, Google, Apple, Square, or PayPal are being built into traditional banking networks. Millennials opt for digitized technology as their financial services requirements include payments, investments, remittances, crowdfunding, consumer banking, and lending through FinTech platforms.
For instance, SimpleTax helps customers file income-tax returns. The software automatically updates the regulations in the tax system. SimpleTax is certified by the Canada Revenue Agency. The software has to undergo thousands of tests every year to ensure that it is user-friendly and 100% accurate. SimpleTax is an innovative product that identifies and mitigates the problems that customers face in filing their tax returns. Therefore, such advancements among customers are expected to drive the growth of the market during the forecast period.
Major Financial Service Application Market Challenge
Privacy and security concerns are major challenges impeding market growth. The concept of online payment is gradually becoming a very popular mode of payment. Payment service providers gather personal data and information about customers so that they can customize advertising messages and target key audiences. Such practices help service providers collect data on customer profiling, behavior, and data mining. However, the indiscriminate use of this data can infringe on customer privacy.
Location-based services also have privacy concerns because such offerings and services operate based on real-time, geo-based information. The data collected from smartphone devices is processed and stored by vendors and so remains open to abuse. As smartphones are used in monetary transactions in real-time, data theft (which is common in the virtual world) can lead to financial losses for consumers and may cause a loss of reputation for service providers. Such risks make consumers averse to online transactions and pose a potential threat to the market for IoT platforms which may hinder the growth of the global market during the forecast period.
Key Financial Service Application Market Customer Landscape
The 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 Service Application Market Customer Landscape
Vendors 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.
Finastra - The company operates under one segment. The company under this segment offers a wide range of pre-integrated solutions which includes retail banking, transaction banking, lending, and treasury and capital markets. The key offerings of the company include financial service applications.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the large enterprises segment will be significant during the forecast period. There is a very high adoption of online payment among large enterprises owing to the generation of many transactions. Companies operating in the banking, financial services, insurance (BSFI), IT, and manufacturing sectors are the major contributors to this segment.
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The large enterprise segment was valued at USD 58.50 billion in 2017 and continue to grow by 2021. The intraregional cross-border banking activity is intensifying globally. This leads to an increase in the need for financial service applications. This, in turn, leads to an increase in the adoption of financial service applications during the forecast period. Modern vending machines are equipped with contactless and card-based payments. This is a major factor driving the growth of the market. Most market revenue is generated by large enterprises as they are more inclined toward technologically advanced services such as payment gateways and mobile wallets. Thus, the rapid adoption of online transactions in large enterprises is expected to propel the growth of the global market during the forecast period.
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North America is estimated to contribute 36% 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.
North America accounted for the largest share of the global market in 2022. Rapid growth in digital connectivity and the penetration of prominent vendors are driving the growth of the market in the region. The rise in numerous online trading and finance platforms, technological innovations, changes in the business and finance environment, and the presence of local and global players are the key factors that are expected to fuel the growth of the market during the forecast period.
Many banks and financial institutions in North America have started adopting IoT technology. In 2020, the Bank of America, a multinational banking and financial services institution based in the US, expanded the mobile wallet capabilities for corporate clients in EMEA and APAC. The expansion of mobile wallet capabilities has allowed bank clients to use Corporate Travel and Purchasing Cards, and now they will be able to use Apple Pay and Google Pay to make and manage card purchases. Thus, owing to such factors the regional market is expected to grow during the forecast period.
The COVID-19 pandemic in 2020 led to significant challenges to the regional market. However, in 2021, the initiation of vaccination drives in the US and other North American countries led to a decline in the number of COVID-19 cases, which significantly increased the demand for financial services. In the current scenario, financial service organizations require an efficient and reliable business intelligence solution to meet their business needs. In addition, owing to an increase in the number of financial institutions, there will be a need for such financial services, which are expected to contribute to the growth of the regional market during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and analyzes the latest trends and growth opportunities from 2017 to 2027.
Financial Service Application Market Scope |
|
Report Coverage |
Details |
Page number |
158 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.85% |
Market growth 2023-2027 |
USD 54.72 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
7.03 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 36% |
Key countries |
US, Canada, China, UK, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accenture Plc, Broadcom Inc., Cisco Systems Inc., Encora Digital LLC, Fidelity National Information Services Inc., Finastra, Fiserv Inc., HDB Financial Services Ltd., Infosys Ltd., International Business Machines Corp., Microsoft Corp., NCR Corp., Oracle Corp., Perfect Ltd., Salesforce.com Inc., SAP SE, ServiceNow Inc., Temenos Headquarters SA, SS and C Technologies Holdings Inc., and Tata Consultancy Services Ltd. |
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, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data you are looking for, you can reach out to our analysts and get customized segments. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
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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