Core Banking Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 17.54 Billion |
| Market Size (2029) | USD 40.81 Billion |
| CAGR (2024 - 2029) | 18.40 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Core Banking Market Analysis
The Core Banking Market size is estimated at USD 17.54 billion in 2024, and is expected to reach USD 40.81 billion by 2029, at a CAGR of 18.40% during the forecast period (2024-2029).
- As customers increasingly prefer online and mobile banking, banks are upgrading their legacy systems to core banking solutions that support digital banking services. Digital channels such as mobile apps, internet banking, and digital wallets demand efficient and seamless back-end systems, fueling the adoption of core banking platforms. The growing trend of providing consistent services across multiple channels (mobile, web, in-branch) is driving the demand for core banking systems that support seamless integration and real-time updates across all touchpoints.
- Financial institutions are required to comply with various regulations, such as Basel III, IFRS 9, MiFID II, and GDPR. Core banking systems help banks adhere to these regulations by offering secure, traceable, and auditable solutions for data management and reporting, making them a key driver in the market. Core banking systems provide essential risk management tools that help banks manage financial risk, mitigate fraud, and comply with anti-money laundering (AML) and Know Your Customer (KYC) regulations.
- Customers are increasingly seeking personalized banking experiences, including customized loan offers, tailored financial advice, and personalized banking services. Core banking platforms enable the integration of customer data and analytics to provide these personalized services. Banks are leveraging core banking systems to process customer data in real-time, allowing them to offer immediate personalized services, such as customized recommendations, dynamic loan rates, and targeted promotions.
- The migration of core banking systems to the cloud is a major driver of market growth. Cloud-based solutions offer benefits like scalability, cost savings, reduced infrastructure management, and greater flexibility. They also make it easier for banks to adopt new technologies such as AI, machine learning, and big data analytics. Cloud solutions reduce the need for on-premise hardware, which decreases operational costs for banks. Furthermore, cloud-based core banking systems allow for easy scalability, enabling banks to add new services and expand operations without major infrastructure overhauls.
- Core banking platforms automate many back-office processes, such as transaction management, customer onboarding, compliance reporting, and more. This reduces human error, improves operational efficiency, and decreases overhead costs for banks, which drives demand for modern core banking solutions. Core banking systems provide the infrastructure needed for quicker and more efficient processing of transactions, which is essential in today’s fast-paced, digital-first financial environment.
- Implementing core banking systems can pose a financial challenge, particularly for smaller banks and financial institutions in developing regions. The migration costs from legacy systems to new platforms encompassing software, hardware, training, and integration often present a substantial hurdle.
- Macroeconomic factors play a pivotal role in shaping the core banking market, impacting the demand for core banking systems and guiding the strategic choices of financial institutions. Extended periods of inflation can erode consumer purchasing power, resulting in diminished loan uptake, decreased savings, and a general decline in banking activities. In these circumstances, financial institutions might postpone or curtail their investments in enhancing core banking systems, driven by dwindling revenues and heightened financial uncertainty, which may hamper market growth.
Core Banking Market Trends
Cloud Deployment is Expected to Witness Remarkable Growth
- The evolving needs of the banking and financial services industry are driving the anticipated remarkable growth of the cloud deployment model in the core banking market. Traditional on-premise core banking systems often necessitate substantial capital investments in infrastructure, hardware, and software. In contrast, cloud-based core banking solutions eliminate these costs, presenting a more economical choice for financial institutions. Furthermore, the pay-as-you-go model empowers banks to manage and scale their costs and resources more effectively.
- By utilizing cloud platforms, banks can alleviate the burden of maintaining physical infrastructure such as servers, data centers, and IT personnel resulting in reduced operational costs. This shift allows banks to depend on cloud service providers for maintenance, updates, and security, diminishing the necessity for extensive in-house IT management.
- A standout advantage of cloud deployment is its swift scalability in response to fluctuating demands. As banks grow or face varying customer demands, cloud-based systems can seamlessly handle increased transaction volumes, sidestepping the need for hefty upfront investments in extra infrastructure. Moreover, cloud solutions grant banks the flexibility to swiftly adjust features and functionalities, integrating new services and products to remain competitive in the dynamic financial landscape.
- Cloud providers, heavily investing in security infrastructure, offer advanced features like data encryption, multi-factor authentication, and round-the-clock monitoring. These providers are also more adept at keeping pace with the latest cybersecurity protocols and regulatory mandates, a critical factor in the tightly regulated financial services sector. Additionally, cloud platforms come equipped with built-in disaster recovery and backup solutions, safeguarding data integrity and ensuring business continuity during system failures or cyber threats. This capability is vital for banks aiming to minimize downtime and guarantee uninterrupted access to essential banking services for their customers.
- Cloud solutions facilitate the effortless deployment of core banking systems across diverse regions. This feature holds significant value for banks with a global footprint or those eyeing expansion into new markets. With cloud deployment, banks benefit from a centralized platform accessible from any location, streamlining cross-border operations. Furthermore, cloud-based systems bolster the integration of various digital banking channels—like mobile and online banking, and ATMs—enhancing the overall customer experience and ensuring a seamless, personalized interaction across all touchpoints.
Asia Pacific is Expected to Witness a High Market Growth Rate
- Technological advancements and evolving banking needs are driving significant growth in the APAC region's core banking market. An increasing number of banks in the region are adopting cloud-based platforms, AI, and blockchain technologies. As these technologies progress and banking demands become more complex, the market is expected to maintain its upward trajectory.
- For example, in October 2024, Citi Bank partnered with Google to leverage AI and cloud technology to enhance its digital strategy. This collaboration aims to utilize Google Cloud’s expertise to upgrade Citi's infrastructure. By focusing on modernization and increased security, Citi's partnership with Google Cloud will enable the migration of various workloads and applications. This transition promises improved digital offerings, optimized employee workflows, and enhanced high-performance computing and analytics platforms.
- In the APAC region, banks are moving from outdated legacy systems to advanced, flexible core banking solutions. This shift is driven by the need for scalability, improved customer service, and the integration of digital services such as mobile banking and real-time transactions. Countries like India, Indonesia, and the Philippines, which emphasize financial inclusion, are encouraging banks to invest in modern core systems to serve a broader and more diverse customer base.
- As smartphone penetration and internet connectivity increase, mobile banking is becoming a major driver in the core banking market. With more people gaining access to mobile devices, there is a growing demand for mobile-centric banking services supported by efficient core systems.
- Governments in the APAC region are promoting digital inclusion and banking modernization. Initiatives such as India's "Digital India" and China's push for a cashless society are contributing to the growth of core banking solutions. Additionally, regulatory frameworks are being established to encourage financial institutions to adopt core systems, aiming to extend services to underserved rural and remote populations.
Core Banking Industry Overview
The core banking market is highly fragmented, with global and local conglomerates and specialized players operating across various segments. while several large multinational companies dominate specific high-value segments, numerous regional and niche players contribute to the overall competition, making the market highly diverse. this fragmentation is driven by the demand for core banking across a wide range of end-user verticals, allowing both large and small companies to coexist and thrive in the market.
Leading companies in the core banking market include Fiserv, Inc., Unisys, Temenos AG, Finastra, Capgemini SE, FIS, Infosys Limited, HCL Technologies Limited, Oracle Corporation, and Others. These companies have established strong brand recognition and extensive global operations, enabling them to command significant market share. Their strengths lie in innovation, broad product portfolios, and strong distribution networks. These leaders often engage in strategic acquisitions and partnerships to maintain their competitive edge and expand their market reach.
Core banking market players are prioritizing enhancements to user experience (UX). Their efforts encompass optimizing interfaces, facilitating seamless omnichannel banking, and guaranteeing user-friendly banking applications on both desktop and mobile platforms. A significant number of core banking vendors are transitioning to cloud-based platforms, aiming to deliver solutions that are scalable, flexible, and cost-effective. Additionally, many players are incorporating AI-driven analytics, equipping banks with tools to deliver personalized services to their customers.
Core Banking Market Leaders
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Oracle Corporation
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Unisys Corporation
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Capgemini SE
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SAP SE
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IBM Corporation
*Disclaimer: Major Players sorted in no particular order
Core Banking Market News
- November 2024: Fusion Bank in Hong Kong has launched its next-generation core banking system after a series of successful data migrations and business validations. Leveraging WeBank’s digital banking technology framework, the new system enhances operational efficiency, allowing the bank to swiftly adapt to market changes and pave the way for future innovations and business growth.
- July 2024: 10x Banking, a cloud-native core banking platform, has unveiled a groundbreaking 'meta core' technology. This new category of core technology aims to expedite the transformation journey for banks and financial services. This announcement comes on the heels of 10x Banking securing USD 45 million in funding this January, with backing from prominent investors BlackRock and J.P. Morgan.
Core Banking Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Impact of COVID-19 Aftereffects and Other Macroeconomic Factors on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rising Adoption of Omni-Channel Banking
5.1.2 Shift to Cloud-Based Core Banking Solutions
5.2 Market Restraints
5.2.1 High Implementation Costs
6. MARKET SEGMENTATION
6.1 By Component
6.1.1 Solution
6.1.2 Services
6.2 By Deployment Mode
6.2.1 On-premise
6.2.2 Cloud
6.3 By End-user
6.3.1 Banks
6.3.2 Financial Institutions
6.3.3 Others
6.4 By Geography***
6.4.1 North America
6.4.2 Europe
6.4.3 Asia
6.4.4 Australia and New Zealand
6.4.5 Middle East and Africa
6.4.6 Latin America
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Fiserv, Inc.
7.1.2 Unisys Corporation
7.1.3 Temenos AG
7.1.4 Finastra
7.1.5 Capgemini SE
7.1.6 FIS
7.1.7 Infosys Limited
7.1.8 HCL Technologies Limited
7.1.9 Oracle Corporation
7.1.10 TATA Consultancy Services Limited
7.1.11 SAP SE
7.1.12 IBM Corporation
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE OUTLOOK OF THE MARKET
Core Banking Industry Segmentation
The core banking encompasses the technological platforms that empower banks and financial institutions to efficiently handle fundamental banking operations, including deposits, withdrawals, loans, account management, payments, and a range of other services.
The study tracks the revenue accrued through the sale of core banking solutions by various players across the globe. It also tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry, which supports the market estimations and growth rates over the forecast period. The study further analyses the overall impact of COVID-19 aftereffects and other macroeconomic factors on the market. The report’s scope encompasses market sizing and forecasts for the various market segments.
The core banking market is segmented by component (solution and services), deployment mode (on-premise and cloud), end-user (banks, financial institutions, and others), and geography (North America, Europe, Asia Pacific, Middle East and Africa, and Latin America). The market sizes and forecasts regarding value (USD) for all the above segments are provided.
| By Component | |
| Solution | |
| Services |
| By Deployment Mode | |
| On-premise | |
| Cloud |
| By End-user | |
| Banks | |
| Financial Institutions | |
| Others |
| By Geography*** | |
| North America | |
| Europe | |
| Asia | |
| Australia and New Zealand | |
| Middle East and Africa | |
| Latin America |
Core Banking Market Research FAQs
How big is the Core Banking Market?
The Core Banking Market size is expected to reach USD 17.54 billion in 2024 and grow at a CAGR of 18.40% to reach USD 40.81 billion by 2029.
What is the current Core Banking Market size?
In 2024, the Core Banking Market size is expected to reach USD 17.54 billion.
Who are the key players in Core Banking Market?
Oracle Corporation, Unisys Corporation, Capgemini SE, SAP SE and IBM Corporation are the major companies operating in the Core Banking Market.
Which is the fastest growing region in Core Banking Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Core Banking Market?
In 2024, the North America accounts for the largest market share in Core Banking Market.
What years does this Core Banking Market cover, and what was the market size in 2023?
In 2023, the Core Banking Market size was estimated at USD 14.31 billion. The report covers the Core Banking Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Core Banking Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Core Banking Industry Report
Statistics for the 2024 Core Banking market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Core Banking analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
