Retail Core Banking Solution Market Outlook 2031
The global retail core banking market size was valued at USD 4.8 Million in 2022 and is likely to reach USD 8.01 Million by 2031, expanding at a CAGR of 9.8% during the forecast period, 2023–2031. The market growth is attributed the growing demand for easily accessible user-friendly and versatile retail banking applications.
Retail core banking is the channel between banks and their clients. It offers enhanced flexibility to account holders in banking transactions spread across multiple branches of the same bank with the help of back-end systems. The core banking operations include account creation, customer relationship management, deposits and withdrawal processing, loan issuing and servicing, and interest calculations.
Retail core banking solutions help banks in gaining a competitive advantage in the fast-evolving market by offering feature-rich, multi-dimensional, and user-friendly interfaces to consumers. Core banking solutions also help in bringing down errors and operational costs by minimizing human intervention with the help of advanced data processing techniques and automation.
According to Gartner Inc., the demand for retail core banking applications is expected to grow substantially due to digitalization strategies adopted by the banks. MagicQuadrant, a tool developed by Gartner Inc. provides a graphical competitive position for tech companies in the retail core banking solution sectors. The tool analyzed the performance and operational metrics of technology providers and concluded that retail banking applications will be integrated into the service offerings provided by the banks.
Centralized online real-time environment banking also known as CORE banking improves the user experience by providing autonomy and control to the account holders and beneficiaries by using the network of branches as a single entity. It enables customers to conduct operations from any corner of the world.
Back-end servers at the respective branches of the bank handle banking operations such as passbook maintenance, calculation, and withdrawal. When a customer performs any transaction or banking operation at the bank the software interface of the respective banking application sends a request to the centralized server for the authentication of the transaction. The centralized server analyses the request and verifies the customer data with the central database and authenticates it after verification.
The Retail core banking market report finds that the COVID-19 pandemic offered potential growth opportunities in the market. Banks were partially operating during the pandemic period. Thus, consumers preferred online banking options to perform banking operations remotely. Furthermore, banks scaled up the digital infrastructures to provide enhanced and multifaceted features on the retail core banking operation platforms.
Retail Core Banking Solution Market Dynamics
Major Drivers
Growing competition from fintech applications and mobile payments wallets is expected to drive the market. The banks want to provide differentiated services to compete with fintech companies that provide card & payment services and mobile payment wallets. Retail core banking solutions offered by banks offer several benefits including the flexibility to do any bank transaction from anywhere.
Existing Restraints
Inadequate infrastructure and lack of awareness in emerging economies are likely to hinder the market. In emerging economies, acceptance of retail core banking solutions is relatively low due to a lack of awareness about the functional and security features provided by the retail banking solution platforms, which may restrain the market to a certain limit.
Emerging Opportunities
Integration of AI and data-enabled services for predictive banking analytics is likely to create significant opportunities for the market. Banking analytics services powered by AI and data-enabled services help customers to analyze the data for marketing purposes and enhance operational efficiencies.
Scope of Retail Core Banking Solution Market Report
The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Retail Core Banking Solution Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Deployment (On-Premise and Cloud), Component (Services and Solutions), Enterprise Size (Large Enterprises and Small and medium Enterprises), and Application (Risk Management, Digital Banking, Regulatory Compliance, and Others)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, Market Trends, and Revenue Forecast
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Key Players Covered in the Report
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SAP SE; Oracle; Polaris IT Group SA; Fiserv, Inc; Temenos Headquarters SA; FIS; Infosys Limited; Tata Consultancy Services Limited; Silverlake Axis Ltd.; Synopsys, Inc.; and Finastra
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Retail Core Banking Solution Market Segment Insights
Based on deployment, the retail core banking solution market is bifurcated into on-premise and cloud. The cloud segment is expected to expand at a significant growth rate during the projection period, owing to its enhanced flexibility and productivity.
Cloud servers offer improved computing power, scalable storage, and enhanced security. The cost-effectiveness of cloud computing technology is further likely to boost the segment.
On the basis of components, the market is segregated into services and solutions. The solutions segment is projected to register a considerable CAGR during the forecast period, due to the rising digitization in banking business models to enhance operational efficiency and transparency in banking operations.
The solutions offered by retail core banking solutions offer remote data retrievals, smooth workflow, and record keeping. The segment growth is further attributed to the growing emphasis on better customer interaction.
Based on enterprise size, the retail core banking solution market is fragmented into large enterprises and small & medium enterprises. The large enterprises segment is expected to register a robust growth rate in the coming years, owing to the strategies adopted by the large banks to offer user-friendly and hassle-free consumer services to account holders and beneficiaries. Large banks want to gain a competitive advantage in the market by offering diversified and innovative services to enrich user experience.
On the basis of application, the market is segmented into risk management, digital banking, regulatory compliance, and others. The regulatory compliance segment is expected to expand at a significant growth rate during the forecast period, due to the rising need for customer data protection.
Banks handle huge data of customers every day across various platforms, interfaces, and networks. This data is vulnerable to cyberattacks. The customer data is protected by deploying additional layers of security across various interfaces.
Regional Analysis
In terms of region, the global retail core banking solution market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the projection period, owing to the rising acceptance of retail core banking solutions and the presence of technology-driven banks and banking solution service providers in the region.
North America houses the majority of investment banks, trading firms, and financial institutions. The consumers from these entities want to perform banking operations conveniently and safely. Retail core banking solutions fulfill the requirements of consumers from diverse complexities and requirements.
Segments
The retail core banking solution market has been segmented on the basis of
Deployment
Component
Enterprise Size
- Large Enterprises
- Small & Medium Enterprises
Application
- Risk Management
- Digital Banking
- Regulatory Compliance
- Others
Region
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
- SAP SE
- Oracle
- Polaris IT Group SA
- Fiserv, Inc
- Temenos Headquarters SA
- FIS
- Infosys Limited
- Tata Consultancy Services Limited
- Silverlake Axis Ltd.
- Synopsys, Inc.
- Finastra
Competitive Landscape
Key players competing in the global retail core banking solution market share are SAP SE; Oracle; Polaris IT Group SA; Fiserv, Inc; Temenos Headquarters SA; FIS; Infosys Limited; Tata Consultancy Services Limited; Silverlake Axis Ltd.; Synopsys, Inc.; and Finastra.
These companies adopted development strategies including collaborations, mergers, acquisitions, partnerships, and product launches to expand their consumer base worldwide. For instance,
- In October 2022, Infosys announced that its owned subsidiary “Infosys Finacle” has been recognized as a leader in digital banking processing platforms, due to its off-the-shelf banking capabilities and well-designed architecture.
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