Market Overview:

The Digital Banking Solution Market size was valued at USD 3.92 Billion in 2022 and is projected to reach USD 9.29 Billion by 2030, growing at a CAGR of 11.30% from 2022 to 2030.

Demand for digital banking is growing due to the proliferation of smartphones, computers, internet connectivity, IoT devices and artificial intelligence (AI). The paradigm shift of banks from traditional networks to digital and automated platforms brings several advantages, including increased productivity, reduced costs and increased revenue prospects. Moreover, recent growth in cloud computing and storage has increased the importance of such technologies in the digital banking platform market.
Banks can move to digital ecosystems with easy-to-deploy and customize digital banking platform solutions. Interactive mobile banking websites and apps help increase customer loyalty by enhancing customer service. Rising demand for smartphones is expected to increase the number of digital banking consumers, which in turn will soon increase the demand for digital banking platform solutions.

Key Trends: Getting more people to use cloud-based platforms will help the market grow

Because of cost savings and economies of scale, cloud technology has changed the way businesses work in many different end-user industries in a big way. The rise of cloud traffic is being driven by the growing use of cloud services around the world. Cisco Systems predicts that by 2021, world cloud traffic will be around 14,078 exabytes per year, up from 3,850 exabytes per year in 2016. In 2019, cloud bandwidth in North America was about 4,860 exabytes per year, which was the most of any region.

Many banks prefer cutting the IT infrastructure cost needed for on-Premise setup by leveraging cloud-based services, which enable them to deploy new products and scale infrastructure quickly, cater to the broader customer base with varied needs at a faster speed, and manage rapidly increasing real-time payments while ensuring compliance and security standards.

Using the cloud has also helped mobile banking platforms offer a responsive User Interface (UI) and support the full banking journey of bank customers on their mobile devices, from signing up to making transactions. Mobile banking is becoming more and more popular, so banks are moving quickly to add mobile banking systems.

Also, more people are using third-party apps like Whatsapp Pay and PhonePay to make real-time payments. This means that banks need more reliable infrastructure to make UPI transactions go easily. For instance, Visa just bought the fintech startup Plaid for $5.3 billion. Plaid makes it easy and quick for applications to connect with users' bank accounts. Because of changes like these, the demand for cloud infrastructure in the digital banking business has grown.

Driver: Escalating pressure from banks to provide better customer service

Customer-centric solutions enable banks to improve customer loyalty by providing enhanced services and fast resolutions to customer queries. Banks are focused on adopting customer retention policies and attracting new customers by effectively communicating with them. A digital banking platform’s omnichannel capabilities help banks facilitate personalized conversations across multiple channels, including the voice, web, and mobile. It enables banks to engage customers across all touchpoints. Monitoring end-to-end customer journeys and tracking all activities help to create an overall view for every customer. Digital banking allows personalization at the scale of 5 and 15% revenue growth for companies in the financial services sector. Consumers expect fast-speed and instant transactions, which is making digital banking platforms more reliable and efficient to use.

Restraints: Emerging nations suffer from a lack of digital literacy

Many people in developing countries still don't know how to use computers, which makes it harder for online and mobile payments to become widely used. This hurts the growth of the digital banking platform market. Digital literacy includes a wide range of skills, like being able to read and understand technical information. These skills help people use and run digital technologies. Most countries in the African region have low digital literacy rates, so people can't use digital technologies to their full potential. Due to the low number of digital transactions, technology companies are also hesitant to spend. So, the rise of the digital banking platforms market is likely to be slowed by the fact that people in emerging countries don't know much about technology.

Opportunity: Banking as a Service (BaaS) model's emergence

The Banking as a service (BaaS) model has significantly shown major growth. It is a model in which licensed banks directly add their digital banking services to the goods of other businesses that are not banks. This means that a business that isn't a bank can give digital banking services like mobile bank accounts, debit cards, loans, and payment services to its customers without having to get its own banking license. Through APIs, digital banking platforms that are part of BaaS can connect directly to the bank networks. BaaS is a growing technology trend that FinTech businesses are using to build new financial services and custom digital strategies.

Challenges: Concerns about protection are growing

 People use digital banking; organizations are worried about keeping customer and money data safe. As the Internet of Things (IoT) has become more widespread, businesses need stronger security and privacy measures to stop breaches. Digitization could fail because of security problems. As the number of IoT-enabled systems grows so will the number of security and privacy problems, like brute-force attacks, spread attacks, and social phishing. Hackers will be able to target any endpoint, gateway, sensor, or smartphone. For instance, Sequoia Capital told its owners in February 2021 that there had been a data breach that put some of their personal and financial information at risk. The company said that it had been attacked by hacking

By Component insights:

In 2021, the platform section made up 59.6% of the revenue in the digital banking platform market, making it the most important part of the market. Over the next five years, the services segment is projected to have the highest CAGR, at 20%. Since fintech was introduced and tech giants started enforcing reforms and making new tools for doing business, banks have been working toward digital transformation. Banks are now embracing digital technology and making the most of it to meet customer wants and launch new products ahead of time.

As financial services move to the cloud, it gives us the chance to build and strengthen a customer-centered strategy. This makes it easier for people to get into the industry and gives more people access to banking solutions. Also, it's making room for new service packages that can use scale, data, and technology to their benefit. So, it can be faster and easier to get data for government reports, reduce risks, and find out if anything is wrong with risk management.

By Service insights:

In 2021, professional services were the most important part of the market and made up 63.0% of the income. On the other hand, during the forecast period, the managed service category is expected to have the highest CAGR, at 21.7%. Managed data centre services could help improve the efficiency of business operations in a hybrid IT design by automating business processes more and making business management stronger. As the number of cyberattacks rises, end-use businesses are likely to use more managed security services.

Managed security services are often used in business to keep private information safe. Managed security services are becoming more popular because of how hard it is to handle data security in a network that is getting more and more complicated. Managed security services are becoming more popular because they help businesses automate tracking for compliance and help them find and reduce risks through security audits.

Demands from customers and pressure from competitors push banks to fully accept digitization. At the same time, demands for performance force lenders to cut costs and keep operating margins steady. New technologies like AI and robotics are helping banks deal with these limits more effectively, especially as new regulations and data security laws put more pressure on resources that are already stretched thin.

By type insights:

In 2021, the retail banking sector had a revenue share of more than 29.4%, and a CAGR of 20.8% is expected over the next five years. Because of the rise of digital banking, the development of new technologies, the merging of industrial ecosystems, and a greater focus on innovation, banking is facing both problems and possibilities. Customers are using digital platforms and fintech solutions more and more. This is breaking up the ties that used to hold together basic financial services like savings, loans, payments, and investments. For instance, Invest India says that 323 banks were using the Unified Payments Interface (UPI) in India as of May 2022 and that 5.9 billion transactions worth more than USD130 billion were made each month.

In 2021, the investment banking sector made up 35.8% of the market's revenue and was expected to grow at a rate of 20.4% per year. As a result of the reopening of foreign markets and the injection of economic stimulus by governments to lessen the effects of COVID-19, there was a lot more activity in the investment banking sector. Many financial banks have gone back to working out of offices and setting up limited client meetings in person. Investment banks have started using hybrid meeting strategies and the newest technology to restructure and improve the way deals are started.

Regional Insights:

The global market for Digital Banking Solutions has been looked at in different parts of the world, like North America, Europe, Asia-Pacific, Latin America, the Middle East, and India. In the near future, this market will be dominated by the global area.

Asia-Pacific had a 30.5% share of the regional market in 2021 and is projected to have the highest CAGR of 21.1% over the next five years. Asia's digital banking business is about to grow at a rate that has never been seen before. As the need for mobile and online options grows, new digital companies are completely changing the industry and the way people and businesses bank. As regulators raise the number of licenses they give out and set standards for a new era of banking, there is a great chance that both current players and new players will join.

Key vendors:

• Appway AG
• Alkami Technology Inc.
• Finastra
• Fiserv, Inc.
• Crealogix AG
• Temenos
• Urban FT Group, Inc.
• Q2 Software, Inc.
• Sopra Banking Software
• Tata Consultancy Service
• Infosys
• Digiliti Money

Backbase is a Dutch company that makes banking technology. It works with big banks, credit unions, and community banks all over the world to provide engagement banking. Backbase has tools for retail banking, business banking, and wealth management.

Backbase was started in 2003 in Amsterdam by Jouk Pleiter and Gerbert Kaandorp. At first, the company made an AJAX system that was based on HTML, JavaScript, and CSS. This turned out to be the Backbase Customer Experience Portal in the end. Backbase used to sell to a wide range of internet-facing businesses, including financial services. In 2013, however, Pleiter changed the direction of the company so that it only worked with financial services. In 2017, the LOEY Award, which is given to the best online startup in the Netherlands, was given to Pleiter for his work at Backbase.

Finastra is a company that makes financial tools. It is based in London, England. The company has a range of goods and services for the retail banking, transaction banking, lending, and treasury capital markets. In 2017, Misys, which made software for financial operations and based in London, which made technology for payments and loans around the world, joined forces to form Finastra. Finastra was thought to be the third biggest financial services company in the world when it was started. 

Roger Morgan and Kevin Lomax started Misys, which makes software for insurance companies. In 1997, it bought a company that made software for healthcare, called Medic Computer Systems.

Fiserv, Inc. is an American multinational company founded in 1984. In October 2015, American Banker and BAI put the company in third place when it came to providing technology to U.S. banks based on income. In 2019, Fiserv made a total of $10.187 billion in sales. Fiserv also owns First Data, which uses the STAR network to connect 2 million ATMs. The Fiserv Forum stadium in Milwaukee, Wisconsin, is named after the company right now. The company grew quickly and was listed on the NASDAQ less than two years after it was founded. This was mostly due to a large number of acquisitions, with Citicorp Information Resources being the biggest in the early years of the company.

Temenos AG is a company based in Geneva, Switzerland, that specializes in business tools for banks and other financial services. Temenos was first made in 1993, and since 2001, it has been traded on the Swiss stock market.

Temenos AG was started in 1993 and is listed on the Swiss stock exchange (SIX: TEMN). It sells banking software tools to retail, corporate, universal, private, treasury, fund administration, Islamic, microfinance, and community banks. Temenos is based in Geneva, Switzerland, and has 67 offices in 40 different countries. It works with more than 3,000 financial companies in 145 different countries. It says that 41 of the top 50 banks in the world use it.

Digiliti Money Group, Inc., usually known as Digiliti Money, Inc., is a company that helps the financial services business with technology solutions and services. The Company's solutions and services let its clients, like banks, credit unions, and alternative financial services providers (AFS), offer their users remote deposit capture (RDC) and prepaid mobile money technologies and related services. It has RDC products for businesses and consumers, mobile money management products for consumers, and training and support services for its customers in the financial services field. Banks and credit unions in the U.S., Canada, and Latin America can buy RDC goods. Traditional financial institutions (FIs) and alternative financial services (AFS) in the US, Canada, and Latin America can use its mobile money management tools. There are banks, credit unions, prepaid card companies, check cashers, and payday lenders among these FIs and AFS providers.

Conclusion:

In this Digital Banking Solution Market report the various key trends, drivers, restraints, segmentation insights, and key vendors are clarified. The segmentation by component divided into platforms & services. In 2021, the platform section made up 59.6% of the revenue in the digital banking platform market, making it the most important part of the market. Over the next five years, the services segment is projected to have the highest CAGR, at 20%.. In 2021, professional services were the most important part of the market and made up 63.0% of the income. On the other hand, during the forecast period, the managed service category is expected to have the highest CAGR, at 21.7%.

Furthermore, on the basis of the geography the market is divided into North America, Europe, Asia-pacific, The Middle East & Africa and Latin America. Asia-Pacific had a 30.5% share of the regional market in 2021 and is projected to have the highest CAGR of 21.1% over the next five years. Asia's digital banking business is about to grow at a rate that has never been seen before. As the need for mobile and online options grows, new digital companies are completely changing the industry and the way people and businesses bank. As regulators raise the number of licenses they give out and set standards for a new era of banking, there is a great chance that both current players and new players will join.

Market Segmentation: 

By Component:

• Platforms
• Services
• Professional Services
• managed services

By Deployment Type:

• On-premises
• Cloud

By Banking Type:

• Retail Banking
• Corporate Banking
• Investment Banking

By Banking Mode:

• Online Banking
• Mobile Banking

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• France
• Italy
• Spain
• UK
• Nordic Countries
• Denmark
• Finland
• Iceland
• Sweden
• Norway
• Benelux Union
• Belgium
• The Netherlands
• Luxembourg
• Rest of Europe
• Asia-Pacific
• Japan
• China
• India
• Australia
• South Korea
• Southeast Asia
• Indonesia
• Thailand
• Malaysia
• Singapore
• Rest of Southeast Asia
• Rest of Asia-Pacific
• The Middle East & Africa
• Saudi Arabia
• UAE
• Egypt
• South Africa
• Rest of the Middle East & Africa
• Latin America
• Brazil
• Argentina
• Rest of Latin America