The global core banking solutions market size was valued at $9,856.45 million in 2019, and is projected to reach $28,785.85 million by 2027, growing at a CAGR of 14.6% from 2020 to 2027.
Core banking can be termed as a back-end system, which involves processing of banking transactions across various branches of a bank on a single platform. Core banking solutions (CBS) is a bank’s centralized system, responsible for ensuring seamless workflow by automating frontend & backend processes within a bank. Moreover, CBS provides customers with an access to banking facilities from any bank branches across a country and facilitates information across delivery channels. Furthermore, CBS helps banks in processing deposits & withdrawals, enhancing customer relationship management activities and transactions management.
Core banking solutions help banks in reducing operational & support expenses, provide real-time transaction processing, and manage bank accounts using interconnected branches globally. Therefore, this has become the foremost growth factor for the market. In addition, increase in adoption of core banking technologies to modernize banking functionality and increase in focus toward providing better customer services are major factors that propel the core banking solutions market growth. However, lack of awareness toward core banking solutions, huge maintenance costs, and shortage of skilled workforce are some of the factors that limit the market growth.
By Component
Solution is projected as one of the most lucrative segments.
Furthermore, developing economies offer significant opportunities for core banking solution providers to expand & develop their offerings, especially among emerging economies such as Australia, China, India, Singapore, and South Korea. In addition, rise in mergers & acquisitions (M&A) among banks, which are seeking to accelerate their existing product development processes by implementing core banking solutions, is expected to provide lucrative opportunities to core banking solutions market players during the forecast period.
On the basis of deployment model, the cloud segment was the fastest growing segment in 2019, and is projected to maintain its dominance during the forecast period. Moreover, surge in use of cloud computing technology through software-as-a-service (SaaS) to help banks in securing storage & transaction processing further boosts demand for this segment.
By Deployment Model
Cloud is projected as one of the fastest growing segments.
The report focuses on growth prospects, restraints, and trends of the core banking solutions market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the core banking solutions market.
Segment review
The core banking solutions market is segmented on the basis of component, deployment model, enterprise size, type, end user, and region. On the basis of component, the market is bifurcated into solution and service. In terms of deployment model, it is divided into on-premise and cloud. Based on enterprise size, the market is segmented into large enterprises and small & medium enterprises (SMEs). By type, it is segmented into enterprise customer solutions, loans, deposits, and others. On the basis of end user, the market is segmented into banks, credit unions & community banks, and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
By Enterprise Size
Large Enterprises accounted for the largest market share in 2019.
The report analyses the profiles of key players operating in the core banking solutions market include Capital Banking Solutions, EdgeVerve Systems Limited, Finastra, FIS, Fiserv, Inc., NCR Corporation, Oracle, SAP SE, Tata Consultancy Services Limited, and Temenos Headquarters SA. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
COVID-19 impact analysis
COVID-19 pandemic has a significant impact on the core banking solutions market, owing to increase in use & adoption of online and digitalized financial services globally. Moreover, to curb the spread of virus, several regions have imposed lockdowns, therefore, core banking solution providers offer software-as-a-service platforms, which helps banks to maintain banking operations and sustain in the market during the pandemic situation. This, in turn, has become one of the major growth factors for the core banking solutions market during the global health crisis.
By Type
Enterprise Customer Solutions is projected as one of the most lucrative segments.
Top impacting factors
Surge in adoption of core banking technology
The banking industry has become a fastest adopter of technologies such as cloud computing, application programming interfaces (APIs), data analytics, artificial intelligence, robotic process automation (RPA), chatbots, machine learning, and blockchain, among others. In addition, with an implementation of core banking solutions, banks are able to perform effective customer analysis while simultaneously enabling customers to carry out their usual banking transactions effectively. Therefore, to modernize banking functionality, several banks are implementing core banking solutions to provide more integrated & value-added services. Hence, adoption & implementation of core banking solutions among banks drive the core banking solutions market growth.
Huge maintenance cost & shortage of skilled workforce
Increase in non-availability of low skilled labor, which are needed to perform highly advance tasks in the banking sector has become one of the major factors limiting the market growth. In addition, to maintain unprecedented levels of speed, accuracy, and cost efficiency banking operations with an implementation of core banking solutions is lacking in the banking industry. Moreover, high initial investments & maintenance cost of the software are expected to hamper the core banking solutions market growth.
By End User
Banks accounted for the largest market share in 2019.
Growth in mergers & acquisitions among banks & financial institutions across regions
With growth in core banking mergers & acquisitions, key players are seeking to accelerate their existing product development processes in the market. In addition, banks & financial institutions are adopting new approaches for on-going business operations rather than rebuilding from scratch. Therefore, to meet customer expectations & enhance automated banking services on a single platform, banks & financial institutions require modernization of core banking systems. As a result, while executing mergers & acquisitions to operate faster, smarter, and provide real-time digital customer experience, banks & financial institutions are expected to adopt & implement core banking solutions. These factors, therefore, anticipated to create an immense opportunity to the core banking solutions market in upcoming years.
By Region
Asia-Pacific would exhibit the highest CAGR of 16.3% during 2020-2027.
Key benefits for stakeholders
- The study provides in-depth analysis of the global core banking solutions market share along with current & future trends to illustrate the imminent investment pockets.
- Information about key drivers, restrains, and opportunities and their impact analysis on the core banking solutions market size are provided in the report.
- Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the industry.
- An extensive analysis of the key segments of the industry helps to understand the global core banking solutions market trends.
- The quantitative analysis of the global core banking solutions market from 2020 to 2027 is provided to determine the market potential.
Core Banking Solutions Market Report Highlights
| Aspects | Details |
 By COMPONENT |
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 By DEPLOYMENT MODEL |
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 By ENTERPRISE SIZE |
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 By Type |
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 By END USER |
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 By Region |
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 By LAMEA |
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 Key Market Players | EDGEVERVE SYSTEMS LIMITED, ORACLE, SAP SE, FISERV, INC., TATA CONSULTANCY SERVICES LIMITED, CAPITAL BANKING SOLUTIONS, NCR CORPORATION, TEMENOS HEADQUARTERS SA, FIS, FINASTRA |
Analyst Review
Increase in adoption of core banking solutions to facilitate easy flow of banking activities, remote monitoring of transactional activities, and enhanced risk management from any branch of the bank are the major factors that propel global core banking solutions market. In addition, the COVID-19 outbreak has a significant impact on the core banking solutions market as several governments have imposed lockdowns & business shutdowns and banks aim at investing in technologies and expanding their offerings in the market. Moreover, to curb the spread of coronavirus, banks are adopting core banking solutions & implementing it in their existing business operations to continue providing banking services during the pandemic situation. However, a considerable number of banks perceive that they have minimum core banking solutions exposure. This scenario is changing, and 2019 has witnessed an increase in sales of core banking solutions, owing to rise in mergers & acquisitions among banks & financial institutions across regions, which are demanding core banking solutions, which has led to innovations & new trends in the core banking solutions industry.
The core banking solutions market is consolidated with the presence of regional vendors such as FIS, Fiserv, Inc., and NCR Corporation. North America and Europe dominated the core banking solutions market, in terms of revenue in 2019, and are expected to retain their dominance during the forecast period. However, Asia-Pacific is expected to experience significant growth in the future, owing to emerging economies, increase in government support toward banking & financial institutions for implementing core banking solutions in the region. Furthermore, the core banking solutions market is particularly brisk in countries such as India, Australia, China, Japan, Indonesia, Korea, Hong Kong, and Singapore, with high GDP growth and rise in per capita income.
Some key players profiled in the report include Capital Banking Solutions, EdgeVerve Systems Limited, Finastra, Oracle, SAP SE, Tata Consultancy Services Limited, and Temenos Headquarters SA. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
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