Financial Services Application - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2019 - 2029

The Financial Services Application Market size is estimated at USD 146.65 billion in 2024, and is expected to reach USD 271.75 billion by 2029, growing at a CAGR of 13.13% during the forecast period (2024-2029).

Financial services applications became focused since financial institutions introduced online solutions and innovations, such as person-to-person payment, online transfers, alerts, and other services.

Key Highlights

• With rapid changes in design, delivery, and financial services ecosystem providers, the core needs of financial services remain the same: payments, investment management, market provisioning, insurance, deposits, lending, and capital raising.
• Digital technology adoption is accelerating in the financial services sector. Paying in cash, attending face-to-face meetings with financial advisors, and even using ATMs are all curtailing aspects of financial services.
• Businesses worldwide require systems that can use customer data to comprehensively analyze usage patterns, demand peaks, and consumption fluctuations to arrive at decisions. It increases the need for a system that handles big data effectively. This demand for business analytics tools drives the market forward.
• The banking and financial sector incorporates risk in mainstream decision-making, using technology to promote a risk management culture. It consistently monitors performance, provides relevant market intelligence, and delivers business and profitability insights.
• Moreover, using technology, such as artificial Intelligence, business intelligence tools, and automation tools, the financial services sector offers new convenience to users, such as digital account opening, chatbots, peer-to-peer payments, and digital loans. According to Accenture, artificial Intelligence will account for USD 1.2 trillion in the financial industry by 2035.
• Payment transactions, card payments, and instant payments are rapidly changing and growing industries, impacting millions of households worldwide. As payments rise, so do cybercrime and data breaches. It is estimated that financial services could lose billions of dollars to cybercrime. Several companies are focusing on strategic partnerships and new product development to address security and compliance requirements to reduce the risk of cybercrime rates. For instance, in October 2022, IBM and Tietoevry announced a global technology and consulting partnership with Tietoevry Banking to bring secure and innovative payment and transaction technology solutions to banks worldwide.
• The COVID-19 pandemic imposed several business challenges on the financial services sector, such as liquidity shortage, short-term drop in demand for credit, cost-reduction in business models, digitizing key operational activities, and adapting to new and revised guidelines by governments.
• In the current scenario, financial services organizations need an effective and reliable business intelligence solution to meet their business demands. Moreover, due to an increasing number of financial institutions, there is a need for such financial services, which is expected to promote market growth.

Financial Services Applications Market Trends

BI & Analytics Application is Expected to Witness High Growth

• The financial sector is one of the most data-intensive sectors in the global economy. Banks and other financial institutions include customer data, such as transactions, payments, withdrawals, and sales points, which they cannot use to gain insights.
• In the financial industry, business intelligence helps the organization maximize its potential, products, and services. Real-time analytics tools like Power BI help financial firms make accurate decisions.
• BI solutions can effectively add value in KPI measurement, knowledge management, analytics, reporting, and collaboration. Further, BI tools are also utilized as a trigger for notifying specific events. Additionally, the market witnessed increased adoption of self-service analytics tools, wherein end users can achieve insights with minimal technical knowledge.
• Using BI in the financial sector makes business easier and gives a competitive advantage over other institutions. Banks, credit card companies, insurance agents, etc., must constantly add new customers to their base and expand their market share. Business intelligence gives companies the information needed to reach their goals.
• Big data analytics is also considered an integral application for business intelligence in the industry. Major enterprises worldwide believe that analytics will completely change the competitive landscape of various industries, and the lack of adoption of big data analytics strategies will result in a crumbling of the market share of the companies shortly.
• It significantly shapes the companies' future by helping the enterprises find essential business significance. Big data analytics is anticipated to witness exponential growth during the forecast period.
• According to Accenture, in 2018, around 75% of millennials in the United States used digital banking, which is set to rise to 77.6% by 2022. The data depicts the growth of financial services in the United States, which will further boost the BI and analytics applications in financial services in the United States.

North America to Hold a Significant Market Share

• Many banks and financial organizations in the country adopted the latest technologies, including artificial intelligence (AI), to offer more personalized services to customers in the United States.
• Businesses worldwide need systems that can use customer data to exhaustively analyze usage patterns, demand peaks, and consumption changes and arrive at a decision. It boosts the need for a system that handles big data effectively, and this demand for business analytics tools drives the market forward.
• The growing adoption of financial service applications increased the sophistication of decisions being taken in organizations, providing increased reassurance to stakeholders.
• Furthermore, digital transaction volumes are increasing as more people open accounts and manage their finances online. With that growth comes more sophisticated fraud, such as synthetic identity fraud and account takeover, impacting businesses and consumers.
• Mastercard is introducing an enhanced Open Banking account opening solution to advance its vision of providing safe, simple, and intelligent choices in payments and financial services. This innovation consolidates account holder verification and identity insights into a single API to help businesses meet customer needs for security and transparency.
• Moreover, in May 2023, Stripe announced a strategic partnership with Microsoft to help North American Business to accept payments directly in Microsoft Teams. Stripe will power Teams Payments, allowing meeting hosts to take real-time card payments during virtual classes, appointments, events, and more. Businesses can now set advance payment through Stripe as a requirement to join a Teams session.
• In April 2022, CIBC Innovation Banking announced the opening of a new office in Seattle, Washington, to support the growing ambitions of the hundreds of established and emerging start-ups in the area. Through this new office, CIBC Innovation Banking will look to deliver its robust expertise in growth capital, advisory, and cash management to innovative companies in the Seattle area.
• The country is one of the significant markets for financial technology adoption, mainly due to being a pioneer in FinTech, further buoyed by the presence of major financial giants in the region.
• In the United States, various institutions, such as the Office of the Comptroller, took necessary measures to achieve a uniform and national set of standards for financial technology institutions. It is further expected to augment the market for such technologies.

Financial Services Applications Industry Overview

The financial services application market is moderately competitive, owing to many players in domestic and international markets. The market appears to be mildly concentrated, with the key strategies adopted by major players being product and service innovation, mergers, and acquisitions. Some of the major players in the market are Accenture Plc, Corporation, and Oracle Corporation, among others.

• December 2022: Deutsche Bank announced a strategic partnership with NVIDIA to embed AI and machine learning in the financial services sector. The partnership will support Deutsche Bank's cloud transformation journey, enrich its leadership in risk management, improve efficiency, and enhance customer service.
• October 2022: EY announced the expansion of its technology ecosystem by introducing a business transformation platform, EY Nexus. It is optimized for financial services and designed to rapidly deploy new products and solutions. Through this launch, the company aims to help insurers, bankers, and wealth and asset managers build for growth and deliver outcomes quickly, integrating with existing legacy systems tech using provider-agnostic services.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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