Treasury and Risk Management Application Market Size [2031]

Report Description

Treasury and Risk Management Application Market Outlook 2031

The global treasury and risk management application market size was USD 4.45 Billion in 2022 and is likely to reach USD 9 Billion by 2031, expanding at a CAGR of 8.10% during 2023–2031. The market growth is attributed to the growing focus on assessing and managing financial risks across sectors.

Rising need to properly manage financial activities, including treasury and risk compliance, in today’s business environment is boosting the market. Globally, organizations from different sectors are witnessing an increase in digital financial activities with a rise in business operations and growth in customer base.

The surge of partnerships, joint ventures, and collaborations is further driving the adoption of FinTech solutions. The preference for digital payments, cloud solutions, and advanced features is expected to generate growth opportunities in the market during the assessment period.

• According to a Future of FinTech Report 2023 by Silicon Valley Bank, digital payments boosted during the COVID-19 pandemic and exhibited sustained growth, unlike other short-lived spikes that surged during the pandemic. In 2022, nearly 69% of consumers preferred contactless payments, which was 22% in 2020, according to a recently published survey.

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The research report finds that the COVID-19 pandemic propelled the treasury and risk management application market. Digitization grew significantly during this time, as offline business activities shrunk, owing to the lockdowns imposed by various governments.

Treasury and risk management applications acceptance surged across organizations in various sectors, particularly from the banking, financial services and insurance (BFSI) sector.  The software as a service (SaaS) solution witnessed high demand from the different sectors, as the cloud solutions enabled rapid implementation and cost saving.

Impact of Artificial Intelligence (AI) on Treasury and Risk Management Application Market

Artificial Intelligence is expected to benefit the market during the projection period, owing to the rising preference for advanced technology tools that require less manual intervention. AI’s rapid analytics and insights capabilities can be used in forecasting cash, detection of payment frauds and other cyber threats, and optimization of operating capital.

Cash flow can be significantly enhanced through AI-based financial and compliance tools. Key players in the market are integrating AI into their solutions to offer clients several benefits including improved control and data-based decision making.

• In February 2023, ION, one of the major providers of treasury and risk management software solutions and services, launched the industry’s first-ever machine learning-powered solution for treasury management. It is intended to help aid companies in validating or replacing manual forecasting of cash with enhanced accuracy and speed.

Treasury and Risk Management Application Market Dynamics

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Major Drivers

Growing implementation of advanced treasury and compliance solutions is a major driver of the market. These applications enable corporations to have greater visibility over transactions and liquidity.

This, in turn, allows better control over the banking processes, bank accounts, compliance, and management of financial transactions. With the growing customer base and digital financial transactions, the financial solutions are required to be the latest version for improved efficiency. These aspects are likely to propel the market during the forecast period.

Growing need for regulatory compliance and mitigation of future financial risks is likely to drive the market in the coming years. Organizations must have clarity over the transactions, which can be important for establishing greater transparency for investors, government organizations, and other stakeholders.

Furthermore, organizations are becoming vulnerable to financial crises occurring every now and then. In such a scenario, it has become essential to use all the historical data points available for applying financial analytics to predict the risks, in order to mitigate them before any major collapse.

Existing Restraints

Increasing occurrence of cybercrime incidences and concerns over data privacy are some of the key restraining factors in the market. Cyber threats are evolving with time, becoming more undetectable and untraceable. Finance-related systems come under higher risks, as they are sensitive assets of any organization.

With the growing access to the internet, cyberattacks are becoming more common. This has become a concerning factor for companies, which is expected to limit the adoption pace of treasury and risk management applications, thereby, restraining the market.

• Studies suggest a significant increase in cyber threats since the COVID-19 pandemic. A 600% rise in cybersecurity and cybercrime incidences were reported in 2020. Hackers are taking advantage of weak network security to exploit the digital assets of companies, across the globe.

Emerging Opportunities

Rising demand for cloud-based FinTech solutions for treasury and risk management is likely to create opportunities in the market. Furthermore, the increasing implementation of blockchain technology in treasury management is fueling the growth scope in the market.

Technology such as AI, Machine Learning, and others are expected to have rapid adoption from finance institutes, as the need for real-time analysis and data-driven decision-making increases.

Scope of the Treasury and Risk Management Application Market Report

The global market research report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

Treasury and Risk Management Application Market Segment Insights

Component Analysis

Based on component, the treasury and risk management application market is divided into software and services. The software segment is expected to expand at a substantial growth rate during the forecast period, owing to the increasing preference for digital solutions to replace or enhance traditional finance and risk management procedures.

These solutions provide companies with greater control over capital, debt, and investment management. Additionally, treasury software’s major benefits include time and cost savings, effective compliance, and better cash visibility, among others.

The services segment is projected to grow at a considerable pace during the forecast period, owing to the rising number of companies employing consultancy, installation, and maintenance services for treasury and risk management.

The proper research and assessment through services enable the adoption of the right software at the right budget. The future cost can be significantly saved with financial management services.

Application Analysis

On the basis of application, the global market is segregated into cash & liquidity management, investment management, forecasting & analytics, account management, financial resource management, compliance & risk management, operations & payment management, and others.

The cash & liquidity management segment is projected to expand at a substantial CAGR during the forecast period, owing to their growing significance in important finance sectors such as Banking, Financial Services and Insurance (BFSI).

Cash & liquidity management through applications allows companies to efficiently secure various operational needs of cash flows. The treasury and risk management applications allow continuous monitoring of cash balances, liquidities, payment processing, and collections. This, as a result, optimizes cash movements, thereby, streamlining the daily operations of an organization.

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Deployment Analysis

On the basis of deployment, the treasury and risk management application market is segmented into on-premises and cloud-based. The cloud-based segment is expected to register a robust growth rate during the assessment period, owing to its scalability and flexibility benefits, among several others.

The cloud-based treasury and risk management solutions can be integrated into the operations in the quickest possible way, allowing the benefits of advanced technology tools without any waiting.

Accessing financial data over the cloud provides greater flexibility to the organization, as the demand for mobile financial tools is rising across the sectors. With the growing preference for cloud computing from different sectors, the companies in the market are developing and launching cloud-based several finance tools with the latest technology features.

End-user Analysis

On the basis of end-user, the global market is segregated into commercial banks, central banks & public agencies, clearing brokers & CCPs, corporates, and others. The commercial banks segment is projected to register a major growth rate during the forecast period, owing to the increasing banking activities over digital platforms. In recent years, especially since COVID-19, the adoption of digital solutions, as an alternative to traditional ones, is expanding in the worldwide banking system.

Digital banking tools are not only optimizing operations but also opening new avenues of growth for companies. The companies in the BFSI sector are heavily relying on digital tools to carry out day-to-day operations including treasury and risk management, thereby, creating efficient cash flow and mitigation of the possible risks. The growing use of embedded banking solutions in different online platforms is expected to boost the opportunities in the market further.

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Regional Outlook

In terms of region, the global treasury and risk management application market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to dominate the market during the forecast period, owing to the rising adoption of technology across the sectors. Companies, especially, in the US and Canada, are increasingly relying on technology solutions for finance management.

The demand for treasury management solutions is significantly higher in North America, due to the global expansion of numerous organizations belonging to this region. This, as a result, necessitates efficient tracking solutions for commercial agreements taking place in global operations.

The treasury and risk management applications facilitate the efficient implementation of policies undertaken by the company across the departments. American corporations in IT and BFSI sectors are extensively adopting financial software solutions to manage the cash flow and send out timely alerts related to debts, payments, installments, and other transactional procedures. These factors are leading the growth of the market in this region.

The market in Asia Pacific is expected to witness rapid growth in the coming years, owing to the rapid digitization of the financial sector, especially, in India and China. Digital transactions are ascending exponentially in this region, as different governments are pushing for digital payments.

BFSI sectors are adopting various digital tools to provide customers with improved convenience and service experience. The rapid-paced adoption of cloud-based treasury management and compliance solutions from the small and medium enterprises in this region is furthering the growth of the market.

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