The global core banking software market was valued at USD 10.89 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2030. This growth is largely driven by the increasing integration of technology to support core banking operations and services. Digitized banking processes have improved service quality and reduced turnaround times. Additionally, advancements in technology allow financial institutions to better meet evolving customer expectations, with features like omnichannel banking access as a key example.
Core banking software provides customers with remote account management via online banking and mobile platforms. These software solutions connect multiple bank branches to a centralized system, allowing for interconnectivity and efficient data searching and comparison. Banks use core banking software to analyze data and enhance internal operations . Furthermore, core banking solutions support transaction monitoring and screening, aiding in the detection and prevention of money laundering.
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The adoption of new technologies across industries has accelerated significantly, and the use of advanced technologies, such as generative AI, in banking helps financial institutions stand out and gain a competitive edge. According to a March 2023 study by Accenture involving over 49,000 customers, 67 % indicated they use branch services only for complex issues requiring in-person assistance. The study also suggests that banks could increase revenue by up to 20% by fostering stronger engagement with primary customers.
Digitization in core banking can make transactions more efficient, as unified systems allow seamless access to customer information, minimizing redundant data entry and enabling faster, more accurate transactions. Core banking systems also support real-time processing, enabling instant account updates, faster payments, and fund transfers. Moreover, these systems enhance security and fraud detection, protecting customers and their transactions.
However, the complexity of banking operations poses challenges. Many financial institutions are still in the early stages of shifting from legacy systems to digital solutions, and privacy concerns associated with this transition may hinder market growth. Nonetheless, core banking solution providers are continuously innovating and offering tailored solutions to meet the specific needs of banks and financial institutions.
End-use Insights
In 2022, the banks segment led the market, accounting for over 56.0% of global revenue. This growth is primarily due to increased investments in modern IT infrastructure. Automated core banking systems ensure accurate data entry and processing, reducing errors. Real-time data access and advanced analytics provide banks with insights into customer behaviors, preferences, and financial trends, allowing for data-driven decision-making.
The financial institutions segment is expected to grow substantially over the forecast period. Financial institutions are increasingly adopting core banking software to improve security, reduce fraud, and enable real-time banking capabilities. The rising adoption rate also reflects a need to bridge the gap between customer expectations and the services provided by traditional banks, which is expected to fuel growth in the financial institutions segment.
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