IMARC Group's report titled "Third-party Banking Software Market Report by Product (Core Banking Software, Multi-Channel Banking Software, Business Intelligence Software, and Others), Deployment Type (On-premises, Cloud-based), Application (Risk Management, Information Security, Business Intelligence, and Others), End-User (Commercial Banks, Retail and Trading Banks), and Region 2024-2032". The global third-party banking software market size reached US$ 28.9 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 54.8 Billion by 2032, exhibiting a growth rate (CAGR) of 7.2% during 2024-2032.
Factors Affecting the Growth of Third-Party Banking Software Industry:
- Digital Transformation in Banking:
The swift digital evolution within the banking industry serves as a key catalyst for the growth of the third-party banking software market. Conventional banking entities are progressively acknowledging the necessity to adjust to evolving consumer demands and technological innovations. Consequently, they are seeking assistance from third-party software providers to revamp their operations and deliver cutting-edge digital services. This evolution encompasses the integration of mobile banking, online account management, and digital payment systems. As a result, third-party software vendors are seizing this opportunity by providing solutions that allow banks to optimize their processes, improve customer engagement, and maintain a competitive edge in the digital landscape.
- Regulatory Compliance and Risk Management:
The rigorous regulatory landscape and the continuous evolution of compliance standards have placed significant demands on financial institutions. In response to this intricate environment, banks are increasingly adopting third-party software solutions that focus on regulatory compliance and risk management. These tools assist banks in adhering to the frequently updated regulations, including anti-money laundering (AML) and know-your-customer (KYC) requirements. Furthermore, they offer sophisticated analytics and risk assessment capabilities, allowing banks to proactively detect and address potential risks. The rising necessity for effective compliance and risk management solutions has driven the growth of the third-party banking software market.
- Cost Efficiency and Scalability:
Cost efficiency and scalability are essential factors for banks seeking to enhance their operational effectiveness. Utilizing third-party banking software presents a financially viable option compared to creating in-house systems. By outsourcing the development, maintenance, and updates of proprietary software to specialized providers, banks can circumvent the significant costs typically involved. Additionally, third-party solutions frequently provide scalability, enabling banks to modify their software usage based on their requirements, whether they are a local community bank or an international financial entity. This adaptability empowers banks to utilize their resources more effectively and concentrate on primary banking functions while depending on third-party software for specialized services.
Leading Companies Operating in the Global Third-Party Banking Software Industry:
- Accenture, Capgemini
- Deltek, IBM
- Infosys
- Microsoft Corporation
- NetSuite Inc.,
- Oracle Corporation
- SAP SE
- Tata Consultancy Services
For an in-depth analysis, you can refer sample copy of the report: https://www.imarcgroup.com/third-party-banking-software-market/requestsample
Third-Party Banking Software Report Segmentation:
By Product:
- Core Banking Software
- Multi-Channel Banking Software
- Business Intelligence Software
- Others
Core banking software dominates the market due to its indispensable role as the central nervous system of banking operations, managing core functions such as transactions, consumer data, and financial services, making it a fundamental and essential component for financial institutions.
By Deployment Type:
- On-premises
- Cloud-based
On-premises holds maximum number of shares due to the continued preference of many organizations, especially in sensitive industries such as finance and healthcare, for maintaining direct control over their infrastructure and data within their own physical facilities.
By Application:
- Risk Management
- Information Security
- Business Intelligence
- Others
Risk management represents the largest segment due to the increasing regulatory requirements and the growing need for financial institutions to proactively identify and mitigate potential risks in their operations.
By End User:
- Commercial Banks
- Retail and Trading Banks
Retail and trading banks dominate the market due to their extensive consumer base, which includes individual consumers and businesses, resulting in high demand for a wide range of banking services and software solutions.
Market Breakup by Region:
- North America (United States, Canada)
- Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)
- Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)
- Latin America (Brazil, Mexico, Others)
- Middle East and Africa
Global Third-Party Banking Software Market Trends:
The emergence of fintech companies, coupled with the increasing popularity of open banking, has fostered opportunities for collaboration between established banks and fintech startups. In order to maintain their competitive edge and broaden their service offerings, banks frequently adopt third-party software solutions that facilitate seamless partnerships with fintech firms. This collaboration not only improves the overall consumer experience but also grants access to innovative financial products and services. Furthermore, many banks and financial institutions are actively pursuing globalization and expansion strategies to explore new markets and diversify their revenue sources. As they venture into international territories, there is often a need for flexible and scalable software solutions that can accommodate varying regulatory frameworks and consumer preferences. Third-party banking software providers deliver the essential expertise and localized solutions, thereby simplifying the process for financial institutions to enter new markets while reducing risks and costs.
Note: If you need specific information that is not currently within the scope of the report, we will provide it to you as a part of the customization.
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