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The Islamic banking software market size is estimated to grow at a CAGR of 10.75% between 2022 and 2027. The market size is forecast to increase by USD 2,731.39 million. The growth of the market depends on several factors, including the issue of smart cards by Islamic banks, the increasing SUKUK issuance, and the mobility in the banking industry. The global Islamic banking software market is referred to as the industry that provides software solutions specially created to meet the needs of Islamic financial institutions. Islamic banking software streamlines and automates several financial operations while upholding Shariah law principles, such as the ban on interest (RIBA) and the encouragement of risk-sharing and asset-backed transactions.
This Islamic banking software market report extensively covers market segmentation by application (retail, corporate, and others), deployment (on-premises and cloud), and geography (Middle East and Africa, APAC, Europe, North America, and South America). 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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The issue of smart cards by Islamic banks is driving growth in the Islamic banking software market. Islamic banks issuing smart cards are expected to play an important role in driving the global Islamic banking software market. By storing personal and financial information on a chip that is integrated into the card, smart cards provide increased security, convenience, and flexibility.
However, as new Islamic banks enter the market, there is an increasing need for secure software solutions that will help them manage their operations and old conventional banks create Islamic banking sections. The demand for smart cards in the banking sector is increasing, and this will drive the growth of the market focus during the forecast period.
The adoption of blockchain technology is a key trend in the Islamic banking software market. Digital transformation has enabled the use of blockchain technology. The digital transformation of the industry verticals such as BFSI and the manufacturing sector is driving the blockchain technology market. With the emergence of blockchain technology, IoT, and supply chain analytics, it has become quite easy to manage complex distribution and logistics systems.
Moreover, the use of cloud computing solutions will enable manufacturing industries to implement IoT technologies by connecting sensors and embedded devices that access real-time data and information. The integration of IT systems may also allow manufacturers to connect with their suppliers and customers through cloud computing. The cloud also helps to lower the per-person access costs significantly. Thus, the adoption of blockchain technology will drive the growth of the global Islamic banking software market during the forecast period.
The lack of expertise, awareness, and training in Islamic banking software is a major challenge in the Islamic banking software market. Many banks are facing a lot of difficulty in adopting new software and advanced technologies. Specialized training in the technology used is required, which enables the banking staff to match the needs of clients. The integration helps to create a common interface and disparate content management systems for banks.
However, due to the lack of qualified experts, a large number of banks are facing problems in implementing integration systems effectively. In most cases, banking firms lack the technical expertise to solve the integration issues, and this may prove to be a major challenge for the integration of business infrastructure. The lack of expertise, awareness, and training will hamper the growth of the global Islamic banking software market during the forecast period.
The market share growth by the retail segment will be significant during the forecast period. The software solutions and services that are specifically tailored to the requirements of individual clients in Islamic banks are referred to as the retail segment in the global Islamic banking software market. By using these software solutions, a wide range of retail banking products and services that are in compliant with Sharia can be provided by the banks.
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The retail segment showed a gradual increase in the market share of USD 1,390.20 million in 2017 and continued to grow by 2021. To provide consumers with a seamless and easy experience while guaranteeing compliance with Islamic banking laws, Islamic banking software was created to automate and streamline retail banking procedures. There are often elements in Islamic banking software for the retail market with a special focus on Islam, like profit and risk-sharing agreements in place of interest-based transactions.
In an on-premises deployment, the software is installed on the institution's own servers and infrastructure, and it is also internally managed and maintained. This deployment strategy provides financial institutions with greater control and flexibility, as they are in a position of direct access to the software enabling them to change it for their specific needs. Several variables influence the adoption of the Islamic banking software market on-premises deployment segment. On-premises deployment, however, faces significant difficulties as well. It necessitates a substantial initial outlay for hardware, servers, and IT infrastructure in addition to continuous maintenance and support expenses. The increased benefit of the on-premises deployment segment will drive the growth of the global Islamic banking software market during the forecast period.
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Middle East and Africa are estimated to contribute 70% 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. Rapid growth has been reported in the Middle East and Africa market for Islamic banking software. One of the major reasons for this is the high concentration of the Muslim population in this region, which is increasing the demand for Islamic banking software. The debt capital markets in the area are heavily influenced by the Dubai Islamic Bank. The launch process is now under the responsibility of the Shariah Supervisory Board of BankABC Islamic.
Moreover, the major revenue-generating countries in this region are the GCC countries, which account for a large portion of the global Islamic finance assets. African countries such as Sudan are also experiencing high growth in their Muslim population, which is increasing the demand for Islamic retail banking. Iran's biggest economic contributor is the world economy. Rising government presence in the regional Islamic banks is further expected to propel growth in the Islamic banking system and, consequently, the Islamic banking software market during the forecast period.
COVID-19 positively affected the regional Islamic banking software market in 2020. The pandemic has accelerated the digitization of regional Islamic banks and also introduced the use of AI in banking. However, the regional government's initiation of vaccination drives in 2021 helped in the reduction of COVID-19 and further enhanced the growth of the global Islamic banking software market. The demand for Islamic banking software will further increase as a result of changes to digitalization and Artificial Intelligence within the region's Islamic bank sector, which, in turn, will increase the growth rate of the regional Islamic banking software market during the forecast period.
The Islamic Banking Software 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 Islamic Banking Software 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.
AutoSoft Dynamics Pvt. Ltd.- The company offers Islamic banking software solutions that are designed to support retail, corporate, and microfinance banking needs along with several banking plug-in modules as per the bank need, under the brand name of AutoSofts.
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 Islamic banking software market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Islamic Banking Software Market Scope |
|
Report Coverage |
Details |
Page number |
170 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.75% |
Market growth 2023-2027 |
USD 2,731.39 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
10.23 |
Regional analysis |
Middle East and Africa, APAC, Europe, North America, and South America |
Performing market contribution |
Middle East and Africa at 70% |
Key countries |
Saudi Arabia, United Arab Emirates, Kuwait, Qatar, and Malaysia |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AutoSoft Dynamics Pvt. Ltd., Azentio Software Pvt. Ltd., Bank Albilad, Bank Alfalah Islamic Banking, BML Istisharat SAL, Codebase Technologies FZE, Craft Silicon Ltd., First Abu Dhabi Bank PJSC, ICS Financial Systems Ltd., INFOPRO Sdn Bhd, Infosys Ltd., International Turnkey Systems Group, Millennium Information Solution Ltd., Nucleus Software Exports Ltd., Oracle Corp., Silverlake Axis Ltd., Sopra Steria Group SA, Tata Consultancy Services Ltd., Temenos AG, and Virmati Infotech Pvt. 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 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 Application
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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