Financial Services Application Market

Shreeja Penchala

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Financial Services Application Market Size is forecast to reach $167.5 billion by 2027, at a CAGR of 7.51% during 2022-2027.

Financial Services Application Market Size is forecast to reach $167.5 billion by 2027, at a CAGR of 7.51% during 2022-2027. Financial institutions across the globe reveal major interest on client trust, privacy and risk management. With the deployment of financial services applications, end-users can enhance their real user monitoring, portfolio management, business transaction processing, insurance data exchange and many other features to build customer trust and uplift their market value. For instance, according to Amazon Web Services (AWS), financial institutions rely on them to provide resilient infrastructure and services to build their mission-critical applications using AWS services, to plan for potential failures, and to meet resiliency requirements owing to the increasing digitization of financial institutions across the globe. This tend to bring significant growth in its demand, further propelling the Financial Services Application industry in the global market.

Financial Services Application Market Report Coverage

The report: “Financial Services Application Industry Outlook – Forecast (2022-2027)”, by Industry ARC covers an in-depth analysis of the following segments of the Financial Services Application Market.

By Software: Business intelligence & Analytics Applications, Business Transaction Processing, Customer Experience, Enterprise IT, Audit, Risk, and Compliance Management and Others.
By Services: Consulting Services, Integration Services, Training & Support Services, Operations & Maintenance and Others.
By Deployment Mode: On-Premises and Cloud.
By End-Use Enterprise: Small and Medium Enterprises (SMEs) and Large Enterprises.
By Geography: North America (U.S., Canada and Mexico); Europe (U.K., Germany, Italy, France, Spain, Russia, Rest of Europe); APAC (China, Japan, South Korea, India, Australia, Rest of APAC); South America (Brazil, Argentina, Rest of Americas); Row (Middle East & Africa).

Key Takeaways

Increasing cyberthreats across various financial institutions and growing adoption of cloud-based services for optimizing digitalization is analysed to significantly drive the Financial Services Application Market during the forecast period 2022-2027.
BI & Analytics Applications segment are analysed to hold highest share 35.12% in 2021 owing to the increasing adoption of self-service analytics tools.
Large Enterprises are analysed to hold the highest market share 61.21% during the forecast period owing to the large amount of data generated and availability of maximum customers which propels the demand of financial services applications for efficient working across the enterprise.
North America is analysed to hold the highest share in 2021 owing to the early adoption of various cloud-based services coupled with increasing implementation of Industry 4.0 in this region.

Global Financial Services Application Market Share, By Region, 2021 (%)

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Financial Services Application Market Segment Analysis - By Software

By Software, the Financial Services Application Market Report is segmented into BI & Analytics Applications, Business Transaction Processing, Customer Experience, Enterprise IT, Audit, Risk, and Compliance Management and Others. BI & Analytics Applications segment is analysed to be the highest growing segment with a CAGR of 9.11% in Financial Services Application Market during the forecast period 2022-2027, owing to the various advantages it offers to the financial institutions as compared to others. BI solutions can be effectively used to add value in KPI measurement, knowledge management, reporting, analytics, and collaboration. Big data analytics is also considered as a very integral application for business intelligence in the industry. For instance, according to Cisco, in 2021, 73% of the cloud workloads and compute instances will be in public cloud data centres in United States, up from 58% in 2019. This huge growth in cloud workloads tend to be significant driving factor for the financial services application, further propelling its market growth.

Financial Services Application Market Segment Analysis – By End-Use Enterprise

By End-use Enterprise, the Financial Services Application Market Report is segmented into Small and Medium Enterprises (SMEs) and Large Enterprises. Small and Medium Enterprises are analysed to be the highest growing segment with a CAGR of 9.31% in Financial Services Application Market during the forecast period 2022-2027, owing to the increasing investments done in this sector uplift the economic structure. Various governments across the globe have been investing in small and medium enterprises to enhance their economic structure and providing reachability and financial services to maximum customers possible. For instance, in November 2021, the Small Industries Development Bank of India (SIDBI) inked a pact with Google to pilot social impact lending with financial assistance up to $0.13 million at subsidized interest rates to small enterprises. These investments tend to uplift the market growth of financial services applications in Small and Medium Enterprises during the forecast period.

Financial Services Application Market Segment Analysis – By Geography

North America is analysed to be the major region with a share of 33% in 2021 for the Financial Services Application Market owing to the early adoption of various cloud-based services across their financial institutions coupled with increasing implementation of Industry 4.0 in this region. Many banks and financial institutions in the United States have adopted the latest technologies, such as artificial intelligence (AI) to provide more personalized services to the customers. The increased adoption of financial service applications has increased the sophistication of decisions being taken in the organizations, which provides an increased level of reassurance to stakeholders. United States is one of the largest markets for financial technology adoption, primarily due to the country being a pioneer in the field of FinTech, further buoyed by the presence of major financial giants in the region. For instance, in April 2021, U.S. banks announced the deployment of AI to monitor customers, workers amid tech backlash across various financial institutions. This tend to drive the demand of Financial Services Applications in North America region, further propelling its market growth.

Financial Services Application Market Drivers

<span times="" new="" roman";mso-fareast-theme-font:minor-fareast;="" mso-bidi-font-family:calibri;mso-bidi-theme-font:minor-latin;color:black;="" mso-themecolor:text1;background:white"="" style="box-sizing: border-box;">Rising government initiative to digitalize financial sector is driving the demand of Financial Services Applications

Rising government initiative to digitalize financial sector is one of most prominent factor driving the demand of Financial Services Applications during the forecast period. Various countries across the globe are investing significantly in the digitalisation to enhance their work efficiency and flexibility across financial institutions however, threat of data breaches is always a major concern which tend to drive the adoption of Financial Services Applications across various enterprises. For instance, in July 2020, NAventures, a corporate venture capital arm of National Bank of Canada announced their Series A funding of worth $11 million to Flinks, a data company that empowers businesses to connect their users with financial services to fuel the company's growth in data connectivity and digitization in the financial services industry. These developments are analysed to bring significant impact in the growth of Financial Services Application Industry during the forecast period.

Increasing urbanization across the globe is propelling the workload of financial institution, further propelling the demand of high performance financial services applications

Increasing urbanization across various parts of the globe is analysed to be a significant factor driving the demand of financial services applications during the forecast period. With the increasing urban population, the workload of financial institution is also affected aggressively. For instance, according to World Bank Reports, urban population grew from 55.27% in 2018 to 56.15% in 2020 across the globe. This increasing urban population tend to enhance the deployment of real user monitoring, portfolio management, business transaction processing software to reduce workloads and human errors, and enhance customer satisfaction process, further driving the Financial Services Applications Market growth. As stated by World Bank, digitalization of financial sectors is the best way to provide banking services to increasing population. Mobile money has leveraged high mobile phone penetration in many developing countries to deliver a ‘first wave’ of digital financial services. In 2021, there are over 850 million registered mobile money accounts across 90 countries, with $1.3 billion transacted through these accounts every day. This tend to create significant impact in the demand of financial services applications, further driving its market growth during the forecast period.

Financial Services Application Market Challenges

High implementation cost is analysed to hamper the Financial Services Application Market growth

One of the most important factor restraining the market growth of Financial Services Application Market across the global is its high implementation cost. As the deployment of high performance financial services software and solutions is witnessing considerable growth in various small and medium enterprises and large enterprises of financial institutions, the cost of development and its integration with enterprise and working ecosystem tend to add up to the overall cost which tend to restrain its market growth across various end-use industries. Moreover, deployment of financial services applications across financial ecosystem requires to be set up at a whole new cloud-based infrastructure which further comes at competitive prices which tend to hinder its market growth. These factors tend to bring major challenges in the Financial Services Application Market growth during the forecast period.

Financial Services Application Industry Outlook

Production Innovation, Acquisitions, Collaboration, and R&D activities are key strategies adopted by players in the market. Financial Services Application top 10 companies include

Accenture
IBM Corporation
Infosys
Misys
Oracle Corporation
SAP SE
Temenos
Microsoft
Symantec Corporation
Cisco Systems, Inc

Recent Developments

In January 2022, Temenos, the banking software company launched their new Temenos IMPACT Partner Program to strengthen its commitment to a partner-first future with the that will cover five different partner categories. The new partner program will drive deeper collaboration and tighter engagement with system integrators, value-added resellers, solution providers, fintechs and consulting companies to open new market opportunities and segments.
In October 2021, Microsoft Corporation announced the expansion of their Financial Services Cloud platform to offer Security and compliance and Fraud and purchase protection applications.
In September 2021, SAP SE announced the global launch of SAP Fioneer, a joint venture for the financial services industry (FSI) between SAP and Dediq GmbH. The launch was aimed to develop new solutions to serve its customers in the rapidly changing banking and insurance industries.