Core Banking Software Market Size, Share, Opportunities, And Trends By Solutions (Deposits, Loans), By Service (Professional, Managed Services), By End-Users (Retail Banking, Treasury, Corporate Banking, Wealth Management), And By Geography - Forecasts From 2024 To 2029

The Core Banking Software Market is projected to grow at a CAGR of 7.89% over the forecast period, increasing from US$ 18.365 billion in 2025 to US$ 26.845 billion by 2030.

Core Banking Software Market Highlights

• The core banking software market grows with digital transformation in financial services.
• AI integration enhances fraud detection and personalized customer experiences.
• Mobile banking apps surge, fueled by consumer demand for real-time access.
• Open banking APIs drive interoperability and third-party service integration.
• North America leads; Asia-Pacific grows rapidly with fintech adoption.

Core banking software serves as the backbone system utilized by banks for processing daily banking transactions, updating accounts, and maintaining financial records. The software plays a crucial role in managing essential banking processes like customer accounts, transactions, and risk management. Additionally, it enables banks to enhance their operations, launch new financial products, and streamline procedures.

Core banking systems provide numerous advantages, one of which is an improved customer experience. The systems enable a more personalized and efficient service, ensuring customers benefit from faster transaction processing, seamless account access, and a wide array of convenient online services. Growing demand for artificial intelligence (AI), increased adoption of cloud technology, and increased investments in technology are driving the core banking software market growth.

The transition to cloud-based core banking systems and digitalization is gaining traction due to their scalability and cost-effectiveness. Following this, in February 2024, Bandhan Bank announced the successful overhaul of its core banking system and the expansion of its digital services through a strategic collaboration with Oracle. Bandhan Bank serves nearly 32 million people through its network of over 6,250 banking outlets across 35 states in India.

The core banking software market is also witnessing innovative product developments and applications. This is mainly driven by AI-driven platforms. In November 2024, Mbanq launched Mbanq.AI. It is a deep enhancement to its core banking technology. The company expects that by 2035, nearly every aspect of banking will be AI-driven.

The core banking software market is witnessing growth driven by increased penetration of banking services in the developing parts of the world, like Asia and Africa. These regions have an expanding banking sector. The shift towards digital banking is a primary driver for the core banking software market. Further, the application of artificial intelligence in the banking sector boosted market growth.

Some of the major market players are Oracle, Finastra, Finacle (Infosys), Temenos Headquarters SA, SAP SE, Capgemini, FIS Global, HCL Technologies, Unisys, and Finserv Inc. In October 2024, Infosys Finacle (EdgeVerve Systems) launched the Finacle Data and AI Suite. It is a set of solutions to empower banks to infuse AI into their digital operations. The suite would offer a set of platforms that enable banks to build low-code, predictive, and generative AI solutions.

Core Banking Software Market Drivers

• Growing demand for artificial intelligence in banking systems enhances the core banking software market growth.

AI is being adopted by banks to carry out various tasks, such as identifying fraudulent activities, approving loans, and providing personalized financial guidance. The adoption of AI not only enhances efficiency and security but also improves the overall customer experience. As a result, the integration of AI functionalities in banking software is contributing to the growth of the industry.

For instance, according to an article published by Temenos in September 2023, Temenos, a prominent figure in banking core systems, has made notable progress in the field of AI for banking. The company introduced a groundbreaking Generative AI solution exclusively tailored for the banking industry, ensuring utmost security. The innovative solution from Temenos primarily emphasizes the automatic classification and labeling of customer transactions.

• Expanding penetration of banking services worldwide

Growing banking penetration in the developing regions has created demand for core banking software. This created a new framework for digital transactions and ease in receiving direct benefit transfer (DBT) from the Government under various schemes.

Schemes like PMJDY (Pradhan Mantri Jan Dhan Yojana) have created people-centric economic initiatives through banking systems. PMJDY in India brought the unbanked into the banking system and expanded the financial architecture of India. It delivers financial inclusion plans. On 9th August 23, the number of total PMJDY Accounts was 50.09 crore; 55.6% (27.82 crore) of Jan-Dhan account holders were women, and 66.7% (33.45 crore) were men. The PMJDY Accounts were increased from 42.20 crore in Mar-21 to 45.06 crore in Mar-22 and reached 48.65 crore in Mar-23.

• Increased adoption of cloud-based technology propels the core banking software market growth.

Cloud technology is set to drive growth in the core banking software market by providing scalability, flexibility, and cost-effectiveness. This enables banks to tailor software resources to meet customer demands, accelerate innovation through shorter development cycles, and lower initial infrastructure expenses, ultimately enhancing accessibility to modern core banking systems.

 According to Capgemini’s article on the World Cloud Annual Report 2023, many banks and insurance companies have adopted cloud technology, with a significant 91% of them initiating the shift. This indicates a strong recognition of the benefits offered by cloud computing. The banking and insurance industries have accelerated their adoption of cloud technology in recent times, as the percentage of firms transitioning to the cloud has risen from 37% in August 2020 to 91% in August 2023.

• Increased investments in technology drive the core banking software systems market growth.

The growth of core banking systems is driven by enhanced investment in technology. Financial organizations are dedicating significant resources to modernizing their fundamental banking systems using cutting-edge technology. This increase in investment drives the integration of cloud-based solutions that provide scalability and adaptability. Outdated systems face challenges in meeting changing customer needs and addressing security risks.

Contemporary core banking software utilizes artificial intelligence for automation, enhances customer experiences, and reinforces security protocols. The advancements in the market improve operational efficiency, reduce costs, and empower banks to stay competitive in the age of digitalization. These cutting-edge innovations are extremely attractive to potential customers seeking a modern and secure banking experience, thus driving market growth.

Core Banking Software Market Restraints

• Integrity hurdles with other banks hinder the banking software systems market growth.

Integrating core banking systems with other bank systems, including loan processing and wealth management, is a crucial requirement. Nevertheless, the procedure frequently proves to be complex and time-consuming.

• Privacy and security concerns curb the banking and software systems market growth.

Financial institutions, along with banks, are responsible for managing a significant amount of sensitive information. The repercussions of any breaches in this data can be highly detrimental. Consequently, these institutions exercise great caution when considering the implementation of new core banking software. It is imperative for them to ascertain that the software is not only secure but also compliant with the most up-to-date privacy regulations.

Core Banking Software Market Segmentation Analysis

• Deposit solutions are gaining a large market share

A deposit solution in core banking software addresses customer deposit management and processing. It involves account creation, deposit operations, accrued interest computations, and maturity handling for the customers. This is a robustly utilized solution in core banking software through which most banks can cut costs, improve customer service delivery, and boost efficiency. It comprises several depositing characteristics, including interest rates and assistance in savings accounts, current accounts, fixed deposit accounts, and recurring deposits.

The deposit segment is witnessing a massive uplift due to the increasing digital attributes of banking service delivery to provide efficient online and mobile bank account opening and deposit facilities to the end customers. As per the analysis of the RBI’s Scheduled Banks Statement up to July 12th, 2024, there is an overall increase of Rs. 2.11 lakh crore (US$2,544 billion) in all the scheduled banks’ deposits. The Indian Government and the RBI brought together industry stakeholders to enhance digital payments, with the volumes under UPI pegged at 2,762 in FY25. India currently possesses 46% of global digital transactions. This surge works in the primary research derived from digital payment transactions, providing useful information on customer behavior, spending habits, and trends in the market. This is useful for sophisticated banking software and systems for analysis of deposit product portfolios, product pricing techniques, and risk management in the core banking software, leading to market expansion in the future.

In May 2024, Intellect launched eMACH AI-created intellect, a digital core for cooperative banks to streamline functions using core banking services, facilitating real-time General Ledger, effortless deposit management, and customer management for accelerated growth and Digital India delivery. In October 2023, the SBS rolled out its next-generation, building block, real-time, 100 percent cloud-based core banking solution, which is a major step forward in business-critical banking applications. Some of the solutions include deposit taking, transfers/payments, lending, compliance & regulatory submission. It links with SBS’s Digital Engagement Platform, positioning itself as a cost-effective, near-shore, full-end-to-end banking solution that will enable banks to get to market faster. The platform optimizes customer and employee relations, emphasizing effectiveness and achievement. 

• By end-users, the retail banking is expected to grow significantly

Retail Banking is the major segment of the core banking software market due to its high frequency of transactions and the increasing need for omnichannel banking solutions that have resulted from the increased adoption of digital banking channels. Retail banks are developing core banking software to meet new rules and data privacy rules to enhance efficiency and minimize the costs of loan processing and account management by automating workflow.

The segment is growing due to the emergent need for digital financial services such as mobile and online banking, and digital payments through mobile devices, which require sound core banking systems to support these channels. By July 2024, 602 total operational banks had adopted the UPI in India. During this period, 15.08 billion digital transactions were completed, amounting to a total value of US$ 25.27 billion (Rs. 2.1 trillion), as per data from IBEF.

Retail banks are capitalizing on their core banking software to provide customer-centric services that are more familiar with expectations and that are omnichannel to achieve a positive customer outlook. The recent development and launches by many market players to cloud-organized and digital-first banking by utilizing core banking software are revolutionizing the retail banking segment through collaboration tools for fintech, depicting new horizons during the forecasted years.

For instance, in November 2024, Hong Kong-based Fusion Bank deployed the next generation of its core banking platform, leveraging WeBank’s digital banking technology framework. The system also minimizes the running of different operations and makes it easier for the bank to respond to change. Established in December 2023, the project covers more than 150 subsystems related to the five central buildings of the bank, including retail deposits and loans, among other services. Further, the demand for financial services in retail banking is driven by global economic growth, driving the core banking software market. Intense competition from fintechs and non-traditional players is compelling retail banks to upgrade their core banking systems, which will drive the market growth during the forecasted period.

Core Banking Software Market Geographical Analysis

• Asia Pacific is projected to grow gradually.

Asia Pacific is anticipated to account for a significant share of the banking software systems market growth due to government initiatives in the region. For instance, according to an article published in the National Payments Corporation of India (NPCI) in September 2023, the governor of the Reserve Bank of India has launched a key initiative for digital payments. NPCI introduced a range of fresh product offerings. These new products, namely Credit Line on UPI, UPI LITE X, and Tap & Pay, Hello! UPI - Conversational Payments on UPI, and BillPay Connect - Conversational Bill Payments align with the theme of the Global Fintech Fest 2023. The primary objective behind these offerings is to establish an all-encompassing, robust, and environmentally friendly digital payments ecosystem.

• The US market is also growing steadily

Technological advancements and digitization have become the latest trends to prosper in the current competitive scenario, positively driving the demand for software solutions in various industrial sectors, including banking. Being a global economy, the United States has a well-established banking infrastructure with an average volume of billions in daily transactions.

Core banking has become the backbone of the financial structure, which assists American banks in processing and keeping the records of such transactions uniform. Various developments in software solutions are being made by the major companies in the country to minimize the risk of data breaches, money theft, or unauthorized access. For instance, Oracle’s core banking solutions enable microfinancing and wealth management and offer models for varied businesses that capitalize on digital core banking.

Moreover, the ongoing shift towards artificial intelligence is also driving innovations in software solutions for banking. Rapid urbanization has elevated the purchasing power of people in America, which has led to a simultaneous increase in the scale of daily transactions. With the rise of e-network, the demand for software solutions to streamline the data and remove any complexities will also grow, thereby improving the overall regional market growth.

According to the data provided by the Federal Reserve System, in 2023, the total number of transactions stood at 18,858 million, with a total evaluation of US$39,464 billion, representing an increase of 2% over the transaction value recorded in 2022. Likewise, the same source also specified that in the same year, the average volume of daily transactions was 75.4 million with a valuation of US$157.9 billion, a 2.1% growth over the average transactional volume recorded in the preceding year.

Core Banking Software Market Key Developments

• October 2023: Sopra Banking Software (SBS) launched the SBP Core Platform, a cutting-edge core banking solution that merges AI with a cloud-native infrastructure and Software-as-a-Service (SaaS) distribution model. The platform offers scalability, real-time processing, and an open architecture for seamless integration. Moreover, it is equipped with a pre-configured model bank, enabling financial institutions to onboard quickly and reduce operational expenses.
• June 2023: Infosys's partnership with Keytrade Bank highlights its contribution to driving digital transformation in the banking industry. The Indian multinational information technology company revealed that Keytrade Bank, an online bank based in Belgium, has selected its Finacle suite to upgrade its core banking system. This initiative is projected to enhance Keytrade Bank's digital services and customer satisfaction. Through the adoption of a cloud-based Software-as-a-Service (SaaS) model for the Finacle suite on Microsoft Azure, the bank will enjoy improved operational efficiency, quicker product introductions, and a contemporary technology framework.

Core Banking Software Company Products

• Fusion Essence: Finastra's Fusion Essence serves as a cloud-native core banking solution tailored for contemporary financial institutions. This platform enables banks to enhance their competitiveness through a seamless digital interface for customers, encompassing functionalities such as account initiation and customized product suggestions. Moreover, Fusion Essence equips banks with essential resources for streamlined management of accounts, loans, and transactions.

 

• Flexcube: Oracle FLEXCUBE serves as a comprehensive core banking solution suitable for banks of various sizes. It effectively simplifies operations for retail, corporate, and Islamic banking by offering essential features such as loan processing, account management, and trade finance. With its flexible architecture, FLEXCUBE empowers banks to embrace innovation and seamlessly adjust to evolving market requirements.

Segmentation

• By Solutions
  • Deposits
  • Loans
• By Service
  • Professional
  • Managed Services
• By End-Users
  • Retail Banking
  • Treasury
  • Corporate Banking
  • Wealth Management
• By Geography
  • North America
    • United States
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • United Kingdom
    • Germany
    • France
    • Italy
    • Spain
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Others
  • Asia Pacific
    • Japan
    • China
    • India
    • South Korea
    • Taiwan
    • Thailand
    • Indonesia
    • Others

1. EXECUTIVE SUMMARY 

2. MARKET SNAPSHOT

2.1. Market Overview

2.2. Market Definition

2.3. Scope of the Study

2.4. Market Segmentation

3. BUSINESS LANDSCAPE 

3.1. Market Drivers

3.2. Market Restraints

3.3. Market Opportunities 

3.4. Porter’s Five Forces Analysis

3.5. Industry Value Chain Analysis

3.6. Policies and Regulations 

3.7. Strategic Recommendations 

4. CORE BANKING SOFTWARE MARKET BY SOLUTION

4.1. Introduction

4.2. Deposits

4.3. Loans

5. CORE BANKING SOFTWARE MARKET BY SERVICE

5.1. Introduction

5.2. Professional

5.3. Managed Services

6. CORE BANKING SOFTWARE MARKET BY END-USER

6.1.  Introduction

6.2. Retail Banking

6.3. Treasury 

6.4. Corporate Banking

6.5. Wealth Management

7. CORE BANKING SOFTWARE MARKET BY GEOGRAPHY

7.1. Introduction

7.2. North America

7.2.1. USA

7.2.2. Canada

7.2.3. Mexico

7.3. South America

7.3.1. Brazil

7.3.2. Argentina

7.3.3. Others

7.4. Europe

7.4.1. United Kingdom

7.4.2. France

7.4.3. Germany

7.4.4. Spain

7.4.5. Italy

7.4.6. Others 

7.5. Middle East and Africa

7.5.1. Saudi Arabia

7.5.2. UAE

7.5.3. Israel

7.5.4. Others

7.6. Asia Pacific

7.6.1. China

7.6.2. Japan

7.6.3. India

7.6.4. South Korea

7.6.5. Taiwan

7.6.6. Thailand

7.6.7. Indonesia

7.6.8. Others 

8. COMPETITIVE ENVIRONMENT AND ANALYSIS

8.1. Major Players and Strategy Analysis

8.2. Emerging Players and Market Lucrativeness

8.3. Mergers, Acquisitions, Agreements, and Collaborations

8.4. Competitive Dashboard

9. COMPANY PROFILES

9.1. Oracle

9.2. Finastra

9.3. Finacle (Infosys)

9.4. Temenos Headquarters SA

9.5. SAP SE

9.6. Capgemini

9.7. FIS Global

9.8. HCL Technologies

9.9. Unisys

9.10. Finserv, Inc.

Oracle

Finastra

Finacle (Infosys)

Temenos Headquarters SA

SAP SE

Capgemini

FIS Global

HCL Technologies

Unisys

Finserv, Inc.