The financial services industry is unique among others in that its core business model is not transactional, the direct exchange of payment of a product or service but rather one of stewardship. Whether in banking, insurance, lending, or investing, financial service advisors are entrusted with the care of a given client’s assets and accounts; the client expects their relationship to yield high personal gain and minimal inconvenience. Although financial solutions are, in essence, commodities, they can be much harder to differentiate than tangible products, which means financial service companies are constantly struggling to distinguish their product portfolio from competitors. Faced with such a high degree of competition, most firms are placing a renewed focus on the client relationship itself. The global financial services application market was valued at US$ 79655 million in 2017. In addition, the industry will continue to grow rapidly over the forecast period (2019-2025) with a CAGR of 7.8 % to reach US$ 143812 million by 2025. Increasing number of fintech would also derive the market for financial service application software market. FinTech is an organization that combine innovative business models and technology to enable, enhance and disrupt financial services. The below figure illustrates the adoption of fintech globally.
The high competition in the financial services sector can be explained, in large part, by the size and saturation of the market. In the U.S. alone, finance and insurance are worth $1.2 trillion, which accounts for 7.9 percent of all gross domestic product (GDP). As larger firms with higher asset values expand their reach, smaller commercial institutions and private firms struggle to keep pace. With the use of technology, the banking and financial sector has incorporated risks into the mainstream decision-making, promoting a culture that incorporates risk management, consistently monitoring performance, providing relevant market intelligence, and delivering business and profitability insights. The global financial crisis brought the financial services industry into the limelight, questioning the data quality and the industry’s direction and decision-making. In the current scenario, financial services institutions need a potent and reliable business intelligence solution, to meet their enterprise needs. Due to the increasing number of financial institutions, there is a need for such financial services. These services are also found to enrich consumer experience, along with optimizing the workforce. On, the contrary, high deployment costs restrict the widespread use of such services. A high number of regulatory issues also hamper the growth of the market.
The adoption rate of FinTech is growing faster than anticipated. The actual global adoption rate of 64% in 2019 exceeds by 12 points the 52% future adoption rate predicted by our 2017.
The study also analyses the global financial services applications market across different software types that include Payment Gateways, Budgeting software, Financial Forecasting, Bookkeeping, and Financial Management. Among different software types, Payment Gateways held the maximum share in 2017. However, due to an increase in demand for financial forecasting, software to reduce the future rises is anticipated to be one of the fastest-growing market segments, growing at a CAGR of 7.8% during the forecast period (2019-2025). To analyze the growth potential of the financial services applications industry, the report is further analyzed based on different geographies including North America, Europe, Asia-Pacific, Latin America and the Middle East and Africa. In 2017, North America was the largest market in value terms, with the highest market share in the industry followed by Europe. Whereas the Asia-Pacific region is expected to grow at the fastest rate at 10 % CAGR from 2019-2025. Some of the leading players in the market are FIS Global, Fiserv, Microsoft, Salesforce, IBM Corporation, Infosys Ltd., and TCS Ltd.
The global Financial Services Applications Software market generated revenue of US$ 85.4 billion in 2018. The sector is expected to witness a CAGR growth of 7.8% during the forecast period 2019-2025, to reach a market size of US$ 143.8 billion by 2025. North America dominated the global Financial Services Applications software market; however, Asia-Pacific is expected to witness highest CAGR growth during the analyzed period.