The global financial services software market size was valued at nearly USD 129.5 Billion in 2022 and is anticipated to reach USD 278.9 Billion by 2031, expanding at a CAGR of 8.9% during the forecast period, 2023 – 2031. The growth of the market is attributed to the emergence of digital channels in banking, the enhancement of customer services, and the optimization of the workforce.
Financial software services are specifically designed to store financial information, automate, and aid businesses and individuals in transaction processing. The storage, management, and analysis of financial records and transactions are easily managed using financial software services. Financial software aid organizations in monitoring risks, managing organizations, and planning investments in smart ways.
Financial software services include general ledger, spreadsheets, payroll outsourcing for businesses, accounts receivables and payables, financial planning, and portfolio management. Financial software is a broad category of software that majorly deal with monetary transactions and accounting.
The market report finds that the COVID-19 pandemic propelled the financial services software market with a rise in transactions through digital platforms due to government-imposed lockdowns around the world. Lockdown restrictions led to a boost for online payments free from cash as precautions against the spreading of the virus through contact.
The rise of mobile banking and unified payment services spurred the financial services software market during the pandemic. Financial software services equip organizations through structured planning for ensuring financial growth and stability through integrated budgeting and forecasting.
Organizations are empowered in reporting revenue streams with accuracy. Customer understanding and interactions are improved through financial insights provided by financial software services.
Financial Services Software Market Dynamics
Growing investments by fintech companies in introducing technology for managing daily transactions that are expected to boost the market. As per a report by Microsoft Dynamics 365 survey of banks and financial service firms, more than 25% of the overall budget of a financial firm is focused on improving customer experiences.
This is possible through the introduction of technology that provides customer insights and preferences. Technology introduction in financial organizations is expected to bolster the market.
High implementation costs for upgrading and incorporating software technologies into existing financial systems hampers the market. Overhauling the existing financial structure may be time-consuming that may restrain the market.
Increasing government initiatives around the world to encourage digitalization and online payment mediums is expected to provide expansion opportunities. The introduction of financial software aids in providing transaction transparency, which is expected to create lucrative opportunities for financial services software market development.
Scope of Financial Services Software Market Report
The report on the global financial services software market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
Financial Services Software Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
Deployment (On-premise and Cloud-based), Component (Services and Software), and Application (Risk and Compliance Management, BI & Analytics, Audit, Business Transaction Processing, Customer Experience, and Others)
Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
Key Players Covered in the Report
Oracle; SAP; Payability; Sage; Hyland Software; Workday; Finastra; Focus Softnet; Debt Pay; IBM; SAS; Obsidian Suite
Financial Services Software Market Segment Insights
Deployment Segment Analysis
Based on deployment, the market is bifurcated into on-premise and cloud-based segments. The cloud-based segment is expected to expand at a significant pace during the projection period, owing to the multiple-user access possible through cloud service access. Scalability, reliability, cost benefits, and security provided by cloud systems are in high demand by financial institutions, which is expected to boost the segment during the forecast period.
The on-premise segment is anticipated to hold a key share of the market, owing to the increased control they provide over an organization’s information and data. Internet access is not essential for on-premise system usages that provide better infrastructure utilization and data security, which is estimated to fuel the segment in the forecast period.
Component Segment Analysis
On the basis of component, the financial services software market is divided into services and software. The software segment is expected to expand at a significant pace during the projection period due to the extensive use by financial organizations for enterprise resource planning (ERP) by consolidating multiple software into one complete financial solution.
The services segment is anticipated to hold a key share of the market, owing to the growing demand for enhancing financial services in transforming business processes. Innovations in financial service provisions in the form of cardless ATM services, QR code payments, exchange-traded funds, and hedge funds are expected to propel the segment.
Application Segment Analysis
Based on application, the market is classified as risk and compliance management, bi & analytics, audit, business transaction processing, customer experience, and others. The bi & analytics segment is projected to hold a key share of the market, as huge amounts of financial data in the form of payments, transactions, withdrawals, and sales points from other financial institutions are used by financial organizations to gain insights.
Business intelligence software solutions provide knowledge measurement and management, KPI value measurement, reporting, collaboration, and analytics that are likely to boost the segment during the forecast period.
The risk and compliance management segment is anticipated to hold a key share of the market due to the widescale purchase of software to identify financial risks and fraud detection. Tracking financial compliances and risk identification through credit scores using financial software is expected to drive the segment in the coming years.
In terms of region, the global financial services software market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. The market in North America is projected to expand at a high CAGR during the forecast period owing to the growing demand from startups for open banking system implementations as per government requirements.
Asia Pacific is expected to dominate the market during the projection period owing to developing digital ecosystems that provide bundled financial services into one software or application platform. The reduction in costs through the integration of varied financial services into one software is expected to fuel the market during the forecast period.
The global financial services software market has been segmented on the basis of
- Risk and Compliance Management
- BI & Analytics
- Business Transaction Processing
- Customer Experience
- Asia Pacific
- North America
- Latin America
- Middle East & Africa
- Hyland Software
- Focus Softnet
- Debt Pay
- Obsidian Suite
Players in the financial services software market include Oracle; SAP; Payability; Sage; Hyland Software; Workday; Finastra; Focus Softnet; Debt Pay; IBM; SAS; and Obsidian Suite. These companies are engaging in strategies such as acquisitions, collaboration, mergers, partnerships, and product launches their market share.
- In May 2022, Finastra collaborated with Amazon Web Services to provide AWS cloud services for accessing Finastra Managed Services (FMS) assisting large financial institutions in managing lending solutions.
- In January 2022, Oracle introduced cloud services in Africa for fostering business innovations in the region. The launch marked Oracle’s 37th cloud region establishment worldwide.