Third-Party Banking Software Market to Grow by USD 10.56 Billion (2025-2029), Digital Payment Solutions Boost Growth, AI Impact on Market Trends - Technavio

NEW YORK, Jan. 2, 2025 /PRNewswire/ -- Report on how AI is redefining market landscape - The global third-party banking software market size is estimated to grow by USD 10.56 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of  6.6%  during the forecast period. Growing use of digital payment solutions is driving market growth, with a trend towards incorporation of analytics into third-party banking software. However, issues related to data privacy and security  poses a challenge. Key market players include American Express Co., Bank of America Corp., Capgemini Services SAS, Capital Banking Solutions, Fidelity National Information Services Inc., Finastra, Fiserv Inc., HCL Technologies Ltd., Infosys Ltd., Intellect Design Arena Ltd., JPMorgan Chase and Co., Mambu BV, Nucleus Software Exports Ltd., Oracle Corp, Q2 Holdings Inc., SAP SE, Sopra Steria Group SA, Tata Consultancy Services Ltd., Temenos AG, The Goldman Sachs Group Inc., Wipro Ltd., and ZKAPITOL Technologies Ltd.,Microsoft Corporation; International Business Machines (IBM) Corporation; Oracle Corporation, Accenture plc; FIS. Inc.

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Market Driver

The banking industry is witnessing a shift in customer behavior, with an increasing preference for mobile devices and digital technologies to access banking services. This trend has resulted in a significant expansion of customer data for enterprises. To effectively utilize this data, third-party banking software with analytics is gaining popularity. These solutions offer benefits such as improved decision-making, risk reduction, enhanced customer insights, and performance optimization. Integration with CRM and other systems streamlines operations and enables smarter choices. Companies like Temenos AG provide analytics solutions with their retail banking software, featuring KPIs, pre-built models, applications, dashboards, reports, predictive analytics, and real-time data. This trend is expected to boost the demand for third-party banking software in the forecast period. 

The third-party banking software market is experiencing significant growth due to increasing demand for digital solutions. Cloud-based banking systems are trending, offering flexibility and accessibility. Components such as core banking, computes, and infotronic systems are essential for these solutions. Advanced features like real-time processing, security, and integration with other financial systems are key considerations. Banking institutions are adopting these solutions to streamline operations and enhance customer experience. The market is competitive with players offering customizable and cost-effective solutions. The future of banking is digital, and third-party software providers are at the forefront of this transformation. 

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 Market Challenges

• The third-party banking software market faces challenges due to data privacy and security risks. Big Data and AI increase the vulnerability of enterprise data in IT infrastructure, particularly in cloud environments. Financial institutions are wary of potential misuse of customer information, leading to hesitance in adopting third-party software. This skepticism hinders market growth. Data security and privacy are paramount to prevent fraud and protect intellectual property.
• The third-party banking software market faces several challenges. One significant challenge is ensuring security and compliance with regulations, particularly in areas like customer identification and transaction tracking. Another challenge is keeping up with the latest technology trends, such as cloud computing and artificial intelligence, to offer innovative features and improve user experience. Additionally, integrating with various banking systems and ensuring seamless data transfer can be complex. Lastly, providing 24/7 customer support and handling queries efficiently is crucial to retain customers and maintain a good reputation.

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Segment Overview 

This third-party banking software market report extensively covers market segmentation by  

1. Type 
• 1.1 Core banking software
• 1.2 Omnichannel banking software
• 1.3 Business intelligence software
• 1.4 Wealth management software
2. Deployment 
• 2.1 On-premises
• 2.2 Cloud
3. Geography 
• 3.1 North America
• 3.2 Europe
• 3.3 APAC
• 3.4 South America
• 3.5 Middle East and Africa
4. Application
5. End-use

1.1 Core banking software- The global third-party banking software market's core banking segment is projected to expand due to retail banking's growth. Government initiatives promoting bank account opening in countries like India boost retail banking, increasing the demand for core banking software among enterprises. Vendors, such as Temenos AG and Fidelity National Information Services Inc., respond by offering advanced systems. These solutions enable efficient application processing, reduce errors, and provide omnichannel access, catering to banking enterprises' digital transformation needs.

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Research Analysis

The Third-Party Banking Software Market in the BFSI industry is experiencing significant growth due to the adoption of digital technology and cloud-computing services. This market includes software solutions for core banking systems, operational efficiency, risk management, wealth management, and business intelligence. These advanced analytical tools enable financial transaction tracking, bookkeeping, and omnichannel banking. Cloud computing, with its benefits of cost savings and scalability, is a major driver for the market. Big data analytics and encryption are essential components of these systems, ensuring information security and contributing to economic growth. Traditional methods are being replaced by computerized methods to enhance efficiency and productivity in commercial and retail banks.

Market Research Overview

The Third-party Banking Software Market refers to the industry that provides financial institutions with software solutions to manage their operations efficiently. These solutions include core banking systems, payment processing systems, treasury management systems, and customer relationship management systems. The market is driven by the increasing demand for digital transformation in the banking sector and the need for cost-effective and efficient solutions. The software enables banks to offer innovative services, improve customer experience, and comply with regulatory requirements. The market is expected to grow significantly due to the rising adoption of cloud-based solutions and the integration of artificial intelligence and machine learning technologies. The solutions offer features such as real-time transaction processing, advanced security, and seamless integration with other systems.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• Core Banking Software
• Omnichannel Banking Software
• Business Intelligence Software
• Wealth Management Software
• Deployment
• On-premises
• Cloud
• Geography
• North America
• Europe
• APAC
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio