Credit Rating Software Market Outlook – 2030
The global credit rating software market size was valued at $0.42 billion in 2020, and is projected to reach $1.92 billion by 2030, growing at a CAGR of 16.5% from 2021 to 2030. Credit rating involves validating credibility of individuals and companies based on their prior transactional and credit behavior. The credit rating software helps banks & financial service providers to precisely assess credit risks and take informed decisions in credit origination and loan monitoring. Credit ratings are issued by credit agencies and are used to assess risks associated with a government's or company's ability to meet its financial obligations. These scores are critical in determining quality of fixed-income securities. Credit rating software gathers and stores historical information about a customer's deals and transactions to generate credit rates when necessary.
The credit rating software helps in faster approval of loans for consumers and provides instant results about the credit score of a consumer. In addition, credit rating software reduces chances of bad debts for financial institutions and increased concern among consumers for maintaining good credit scores. However, low credit score makes it difficult for SMEs to avail loans from banks to purchase goods from domestic as well as international borders and lack of support to individuals to avail loans has become a major factor that limits the credit rating software market growth.
On the contrary, developing economies offer significant opportunities for credit rating software companies as banks increasingly rely on these credit rating software to determine credit worthiness of consumers due to high chances of consumers turning bad debts for banks. Moreover, demand for loans such as personal loans, education loans, and other type of loans has increased in recent years and this trend is further expected to increase in the future, which is anticipated to provide a potential opportunity for the credit rating software market growth.
By Offering
Software segment accounted for the highest market share during the forecast period
The report focuses on growth prospects, restraints, and trends of the credit rating software 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 credit rating software market outlook.
By Deployment Model
Cloud segment will grow at a highest CAGR of 18.3% during 2021 - 2030
Segment Overview
The credit rating software market is segmented on the basis of offering, deployment model, enterprise size, end user, and region. By offering, the credit rating software market is bifurcated into software and services. The services segment is further segregated into professional services and managed services. By deployment model, it is divided into on-premise and cloud. By enterprise size, it is bifurcated into large enterprises and small & medium-sized enterprises (SMEs). By end user, it is divided into banks, insurance companies, credit unions, savings & loan associations, and others Region-wise, it is analysed across North America, Europe, Asia-Pacific, and LAMEA.
By Enterprise Size
Large Enterprises segment will maintain the lead throughout the forecast period
Competitive Analysis
The credit rating software market analysis includes top companies operating in the market such as Abrigo, ACTICO GmbH, FICO, Fitch Ratings Inc., Loxon Solutions Zrt, Moody's Analytics Inc., Pegasystems Inc., SAP, Soft4Leasing, and Softlabs Technologies & Development Pvt. Ltd. These key players have adopted various strategies, such as product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations, to increase their market penetration and strengthen their foothold in the industry.
By End User
Banks segment will secure the leading position during 2021 - 2030
COVID-19 Impact Analysis
The COVID-19 pandemic has a positive impact on the credit rating software industry. Financial institutions had strict rules regarding granting of loans since many consumers had very less funds to pay back, increasing the chances of bed debts. Hence, credit rating software helped banks to thoroughly check consumer credit behavior before granting loans. Therefore, demand for credit rating software increased during the COVID-19 pandemic and had a positive impact on the market.
By Region
Asia-Pacific region would exhibit the highest CAGR of 20.2% during 2021 - 2030
Top Impacting Factors
Credit Rating Software Reduces Chances of Bad Debts For Financial Institutions
Credit rating software reduces the risks involved in loan transaction such as default in payment by consumer after a loan is granted. Banks can choose their customers based on their credit score and thus, reduce chances of bad debts. In addition, with higher credit score, banks & non-banking financial companies (NBFCs) get more confident that consumers can repay the loans. Most credit scores range between 600 and 750. Various lenders such as NBFCs & banks provide loans and credit cards based on credit score. Therefore, credit rating software helps financial institutions reduce the bad debts and increase profitability.
Increase in Concern Among Consumers to Maintain Good Credit Score
Credit rating software facilitates growth of loan approvals for banks and consumers based on their credit score. With the help of credit rating software, consumers have become more aware about advantages of a good credit score, since it helps them to get loans of big amounts and these credit scores can be improved by timely payment of loans. Moreover, having a good credit score has numerous advantages such as consumers can avail cheaper interest rates on loans, credit cards with better benefits & rewards, avail pre-approved loans, get loans with longer tenure, quicker approval on credit applications, and others. Therefore, credit rating software helps banks as well as consumers to be more informed about their credit score and its importance for getting a loan. Thus, this is a major driving factor for growth of the credit rating software market.
Increase in Demand For Loans
Demand for loans such as personal loans, education loans, and other type of loans has increased in recent years and this trend is expected to further increase in the future. Moreover, importance of credit score has also increased as it is one of the major factors involved in getting a loan approved from banks. Banks need to check credit score of consumers before granting any loan, and if the credit score is low, then the loan is not approved by the bank since the chances of loan default increases. Therefore, with increasing demand for loans, demand for credit rating software has also increased. As a result, these are the major factors that provide lucrative opportunities for growth of the credit rating software market.
Key Benefits For Stakeholders
- The study provides in-depth analysis of the global credit rating software market share along with current trends and future estimations to illustrate the imminent investment pockets.
- Information about key drivers, restrains, and opportunities and their impact analysis on the global credit rating software market size are provided in the report.
- Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the credit rating software market.
- An extensive analysis of the key segments of the industry helps to understand the credit rating software market trends.
- The quantitative analysis of the global credit rating software market forecast from 2021 to 2030 is provided to determine the market potential.
Credit Rating Software Market Key Segments
By Offering
- Software
- Services
- Professional Services
- Managed Services
By Deployment Model
- On-premise
- Cloud
By Enterprise Size
- Large Enterprises
- Small & Medium-Sized Enterprises (SMEs)
By End User
- Banks
- Insurance Companies
- Credit Unions
- Savings & Loan Associations
- Others
By Region
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Russia
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- South-East Asia
- Rest of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa
Key Market Players
- Abrigo
- ACTICO GmbH
- FICO
- Fitch Ratings Inc.
- Loxon Solutions Zrt
- Moody's Analytics Inc.
- Pegasystems Inc.
- SAP
- Soft4Leasing
- Softlabs Technologies & Development Pvt. Ltd.
Credit Rating Software Market Report Highlights
| Aspects | Details |
 By Offering |
|
 By Deployment Model |
|
 By Enterprise Size |
|
 By End User |
|
 By Region |
|
 Key Market Players | ACTICO GmbH, Abrigo, Loxon Solutions Zrt, FICO, Fitch Ratings, Inc. |
Analyst Review
Credit rating software is increasingly used for managing loans based on appropriate financial records of borrowers. In addition, there is an increase in demand for rating models by banks & financial institutions to accurately assess credit risks and take a well-informed decision for credit origination and loan monitoring choices. Furthermore, credit rating software facilitates credit analysis, lending automation, and continuous monitoring over credits, which propels the market growth.
During the COVID-19 outbreak, the credit rating software market has experienced significant growth as banks & lending institutions are digitalizing their loan approval schemes to fast track the process. Moreover, credit rating software helped lenders with eliminating costly paper trails, reduces fraud, and secure leases. These factors have resulted into massive adoption of credit rating software among banks, financial institution, and other lenders during the pandemic situation
The credit rating software market is consolidated with the presence of regional vendors such as Moody's Analytics, Inc., SAP, Fitch Ratings, Inc., and ACTICO GmbH. Some of the key players profiled in the credit rating software market report include Abrigo, FICO, Loxon Solutions Zrt, Pegasystems Inc., Soft4Leasing, and Softlabs Technologies & Development Pvt. Ltd. Major players operating in this market have witnessed significant adoption of strategies that include business expansion and partnership to reduce supply and demand gap. With increase in awareness & demand for credit rating software across the globe, major players are collaborating their product portfolio to provide differentiated and innovative products.
The Credit Rating Software Market is estimated to grow at a CAGR of 16.5% from 2021 to 2030.
The Credit Rating Software Market is projected to reach $1.92 billion by 2030.
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Surge in demand for credit ratings to assess quality of fixed income securities etc. boost the Credit Rating Software market growth.
The key players profiled in the report include Abrigo, ACTICO GmbH, FICO, Fitch Ratings Inc., Loxon Solutions Zrt, and many more.
On the basis of top growing big corporations, we select top 10 players.
The Credit Rating Software Market is segmented on the basis of offering, deployment model, enterprise size, end user, and region.
The key growth strategies of Credit Rating Software market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.
Asia-Pacific region would grow at a highest CAGR of 20.2% during the forecast period.
Banks segment will dominate the market during 2021 - 2030.
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