IT BFSI Market - Forecast(2024 - 2030)

IT BFSI Market Overview

The IT BFSI market size is forecast to reach $160 billion by 2027, growing at CAGR 11.5% from 2022 to 2027. The growth of IT BFSI market is mainly attributed to the growing adoption rate of various advanced payment methods other than traditional methods, automation of banking services, popularity of cloud technology in BFSI sector, and exponential growth in BFSI sector. Apart from that, due to increasing penetration rate of digital payment methods, the threat of cyber attacks is growing, which in turn creates demand for cyber security-based IT BFSI solution. Additionally, digitalization of BFSI sector also provides insensitive to the major market players, to create more advanced IT BFSI solutions including enterprise resource planning, human capital management, customer relationship management and others; that aids this sector in managing its system. However, the incorporation of artificial intelligence and business intelligence in these solutions also plays a major role in fueling the growth of IT BFSI Industry. Hence, the above-mentioned factors are triggering the growth of IT BFSI market during the forecast period 2022-2027.

Report Coverage

The report: “IT BFSI Market– Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the IT BFSI Market.

By Offerings: Solutions (Customer Relationship Management, Human Capital Management, Enterprise Content Management, Cybersecurity, Enterprise Resource Planning, Unified Communication, Artificial Intelligence, Business Intelligence and others) and Services (Professional Services and Managed Services).
By Deployment: On-Premise and Cloud
By Organization Size: Small and Medium Enterprises and Large Enterprises
By Geography: North America (U.S, Canada, Mexico), South America (Brazil, Argentina and others), Europe (Germany, UK, France, Italy, Spain, Russia and Others), APAC (China, Japan India, South Korea, Australia and Others), and RoW (Middle east and Africa).

Key Takeaways

• North America held the major market share in 2021 and is estimated to witness the significant growth during 2022-2027, owning to increasing adoption rate of advanced banking payment methods, exponential growth in North American BFSI sector and the presence of major market players in this region.
• The market of IT BFSI is estimated to witness significant upsurge during the forecast period, owing to the increasing cyber security threats and high adoption rate of digital banking technology, which accelerates the adoption rate of IT services in BFSI sector across the world.
• This industry is consolidated with top market players including IBM Corporation, Oracle Corporation, Microsoft Corporation, CA Technologies, Salesforce.com, inc. among others.

IT BFSI Market Segment Analysis - By Offerings

By offerings, the IT BFSI market is segmented into Solutions and services. The solution segment is analysed to reach $135 billion by 2027, with a significant CAGR of around 7.3%, during the forecast period 2022-2027. This segment is further sub segmented into Customer Relationship Management, Human Capital Management, Enterprise Content Management, Cybersecurity, Enterprise Resource Planning, Unified Communication, Artificial Intelligence, Business Intelligence and others. The growth of this segment is mainly driven by the exponential growth of BFSI sector, and increasing pressure on this sector to provide higher quality services to its customers along with increasing penetration rate of digital financial services. Furthermore, BFSI sector holds high amount of confidential data, which in turn makes this sector a very lucrative market to the cyber attackers. Such factors create demand for various IT BFSI solutions and provides incentives to the market players to take strategical development steps. In June 2021, Federal Bank teamed up with Oracle and Infosys, in order to offer an enhanced customer experience through Oracle CX (Customer Experience) platform. The partnership helped in creating a comprehensive integrated Customer Relationship Management (CRM) solution across marketing, sales, customer service, and social listening, which ultimately aided in strengthening Federal Bank’s operations, and to deliver connected, data driven, and intelligent customer experiences across all touch points. Such developments will accelerate the adoption rate of IT BFSI Solutions, thereby driving the growth of this market during the forecast period 2022-2027.

IT BFSI Market Segment Analysis - By Deployment

Based on Deployment, IT BFSI Market is segmented into on-premise and cloud. According to IT BFSI Market report of IndustryARC, Cloud-based IT BFSI market size is analysed to reach $60 billion in 2027 with a CAGR of 8.7% during 2022-2027. The growth is mainly driven by the digital transformation and technological developments across the world. In addition, cloud-based solutions also offer several benefits such as reduction in operational and infrastructural cost, simple deployment process, better scalability, greater availability compared to on-premise offerings. Apart from that, companies are heavily investing and launching cloud-based various solutions including Customer Relationship Management, Human Capital Management, Enterprise Content Management and others; which is fuelling the demand and growth of this technology. In July 2021, Tata Communications launched IZOTM Financial Cloud, a community cloud platform, specially to fulfil the stringent data privacy, protection compliance and security guidelines defined by India's regulators for the Banking, Financial Services and Insurance (BFSI) sector. This platform helps in building an open banking ecosystem, which in turn aids the BFSI and FinTech industry in enabling the advanced digital banking and financial services. Increased investments along with such launches will provide significant opportunities for cloud-based deployment of IT BFSI solutions in the forecast period 2022-2027.

IT BFSI Market Segment Analysis - By Geography

Based on Geography, the market is segmented into North America, South America, Europe, APAC and RoW. North America dominated the market with around 33% IT BFSI market share in 2021, and is estimated to reach $56 billion by 2027, due to the rapid technological advancement, high growth rate of banking and finance sector, growth in earlier adoption of digital BFSI technology, along with increasing cyber security threat in North America. An FBI report states that, the number of cyber-attacks had increased by 400% during the pandemic in comparison to the pre-pandemic situation, targeting various sectors, especially large corporation, BFSI, government and critical medical organization. Furthermore, during the situation of Covid-19, the usage of digital payment methods has increased exponentially, which also makes this BFSI sector more lucrative for the hackers and attackers. For instance, in June 2020, FBI published a report, according to which 75% Americans used different banking apps last year and the numbers had increased by 8% in just last two months. Such high usage rate of digital payment methods creates more opportunities for IT BFSI market, as these solutions and services aids this sector in managing its complex system. Apart from that, presence of key players and heavy investment made by them for the development new solutions to expand their market share is fuelling the market growth. Hence, the above-mentioned factors are poised to create tremendous growth opportunities for North American IT BFSI Market from 2022 to 2027.

IT BFSI Market Drivers

Rising demand for IT offerings, due to high adoption rate of modern banking technology and increasing Cyber threats is driving the growth of this market

The usage of IT offerings including enterprise resource planning, human capital management, customer relationship management, unified communication, cyber security related IT services and others; in BFSI sector is anticipated to grow during the forecast period 2022-2027, due to increasing security threats in banking sector, misuse of internet and data breaches, high adoption rate of customised advanced banking technologies are the major driving factor for the higher adoption rate of IT services in BFSI sector. For instance, according to some recent report, 32% of Indian customers had increased the usage of digital payment methods during the lockdown period till May 1, 2020 and is anticipated to grow more over the years. Apart from that, BFSI sector extract high amount of confidential and sensitive data, making this sector a prime target for the security attacks, where cyber security IT solutions offers information about network activities, various type of monitoring, file sharing details, document tracking and others. This in turn helps the BFSI sector to become more secure and productive. Hence, the above-mentioned factors are analysed to drive the market in the forecast period 2022-2027.

Strategic steps taken by the market players across the world will fuel the growth of IT BFSI Market during the forecast period:

The players of this market are taking more strategic steps for the expansion of the market through new product launches, acquisition, investments and others, which is set to drive the IT BFSI market growth during the forecast period 2022-2027. In December 2021, BluePi announced about its collaboration with Snowflake to enable the fast-growing BFSI sector and to serve the BFSI sector of India, through recently launched financial services Data Cloud of Snowflake, which will aid the BFSI players in producing customer-centric products and services, building fintech platforms and in accelerating their regulatory compliance. Similarly, in December 2020, YES Bank announced about its new partnership with Salesforce, a leading provide of customer relationship management, in order to build a next generation technology platform for powering the retail lending business, which will help the bank in scaling up its retails assets portfolio. Hence, these types of strategic developments taken by the market players are analysed to boost the growth rate of this market during the forecast period 2022-2027.

IT BFSI Market Challenges

Security related issue of the IT BFSI solutions are harming the growth of this market

All though the IT BFSI market is growing rapidly, but few security concerns related to these solutions are present, which are harming the growth of IT BFSI market. The banks of financial organizations are opting for these services from a third-party company, which may lead to severe security breaches. For instance, in January 2020, P&N Bank of Australia reported that its customer relationship management system was attacked by hackers, during a server upgrade, putting the personal information including name, address, email, phone number, customer number, age, account number, and account balance of around 96,000 members at risk. Hence, the security related issue is poised to impede the IT BFSI system markets growth during the forecast period 2022-2027.

IT BFSI Industry Outlook

Partnerships and acquisitions along with product launches are the key strategies adopted by the players in the IT BFSI Market. As of 2021, the market for IT BFSI industry outlook is consolidated with the top market players.  IT BFSI top 10 companies are

1. IBM Corporation
2. Oracle Corporation
3. Microsoft Corporation
4. CA Technologies
5. Salesforce.com, Inc.
6. Adobe Inc.
7. SAP SE
8. Accenture Plc
9. Micro Focus International Plc
10. Cognizant Technology Solutions Corporation

Recent Developments

• In October 2021, NetSuite made an announcement regarding the launch of a cloud ERP solution, SuiteBanking, which will help the customers in automating the financial processes and equip them with complete visibility into cash flows. This solution allows its users to utilize automated accounts payable and accounts receivable processes, pay bills, send invoices, and get paid, all from the NetSuite platform.
• In July 2021, Deutsche Bank made an announcement regarding its multi-year collaboration with Oracle for modernising database technology of the bank and to accelerate its digital transformation. This partnership helped the bank in upgrading its existing database systems and also in migrating the bulk of its Oracle database estate to an on-premise deployment option of the Oracle Exadata Cloud service. This agreement will also offer a platform to the bank, in order to support in its various applications including trading, payments processing, risk and capital planning and regulatory reporting.
• In July 2020, IndusInd Bank announced about its successful integration with CRMNEXT, the leading enterprise solution provider for BFSI sector. This integration helped the Bank in simplifying the process of customer on-boarding, introduction new products and meet customer demands by automating and customizing processes to fit the modern-day financial requirements.

Relevant Report Titles:

Customer Relationship Management (CRM) Market - Forecast 2021 - 2026

Report Code: ITR 30165

Big Data Analytics in BFSI Market -  Forecast 2021 - 2026

Report Code: ITR 64831

Artificial Intelligence in BFSI Market -Forecast 2021 - 2026

Report Code: ITR 54891

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