Canada Core Banking Software Market Size, Share & Trends Analysis Report By Solution (Deposits, Loans, Enterprise Customer Solutions, Others), By Service (Professional Service, Managed Service), By Deployment (Cloud, On-Premise, SaaS/Hosted, Licensed), By End-User (Financial Institutions, Retail Banking, Treasury, Corporate Banking, Wealth Management, Others), By Bank Type (Large Banks, Midsize Bank, Small Banks, Community Banks, Credit Unions, Others) and Forecasts, 2024-2032

Market Overview

The Canada core banking software market share witnessed significant growth in the past and is expected to expand at a CAGR of 8.8% during the forecast period (2022 to 2030).

Core banking software refers to the fintech business segment that provides the banking industry with software solutions. Core Banking Software handles some of the most important functions of a bank, including account management, transaction processing, and customer relationship management.

The market for core banking software in Canada is expanding quickly due to factors like rising IT infrastructure expenditures, increasing adoption of digital banking, and the emergence of new technologies like blockchain and artificial intelligence. The market is divided into segments according to type, Deployment, and end-user, with banks, credit unions, and other financial organizations making up the majority of end-users.

Major players provide core banking software solutions to financial institutions in this highly competitive industry. By delivering cutting-edge solutions like cloud-based solutions, mobile banking, and open banking to meet the changing requirements of the financial institutions in Canada, these players are concentrating on increasing their market share.

A change in the market is also being seen towards open banking, which enables financial institutions to collaborate with outside providers to develop new goods and services and share customer data. Open banking adoption is anticipated to rise in the upcoming years due to regulatory support and consumer desire for individualized banking services.

Market Dynamics

Canada core banking software market drivers

Increasing need for centralized customer account management

The market is expected to experience growth due to the high demand for efficient management of client banking accounts through a unified platform. Core banking solutions offer bank employees accurate information about bank accounts through an end-to-end platform. This platform includes features such as rapid reporting, enterprise content management capabilities, deposit accounts, credit analysis, customer onboarding, customer relationship management (CRM), account opening, loan origination, workflow, and deposit accounts. By integrating transactional and core systems, core banking solutions eliminate the need for manual operations and separate solutions.

Furthermore, banks worldwide actively implement AI-integrated core banking systems to extract real-time actionable consumer data. These tools enhance operational efficiency, analyze transactions, detect fraudulent activities, minimize risks, and understand consumer behavior. The improved ability to analyze complex data sets enables banks to make more informed decisions about their banking services, products, and operations.

Canada core banking software market restraints

Privacy issues and protection of data

As core banking software becomes more sophisticated, concerns about data security have intensified. Issues such as data loss, mobile viruses, software bugs, and unencrypted data have raised alarms, leading to potential revenue decline for credit unions, corporate banks, and financial institutions. Additionally, the lack of operational flexibility at scale in certain core banking software solutions has resulted in data security concerns and legal complications. An example is a recent incident where a hacker gained unauthorized access to a company's system using their data transfer file program. As technology progresses, the apprehension surrounding data security continues to escalate.

Canada core banking software market opportunities

Increasing focus on advancing banking systems

The workplace culture has been greatly affected by the COVID-19 pandemic, leading to the implementation of work-from-home policies in numerous banks and financial institutions. These institutions have faced challenges in dealing with fluctuating interest rates and delayed lease payments, causing significant adjustments in the financial market. As a result of the ongoing pandemic, many banks and financial institutions are finding it difficult to navigate changes in loan and credit management. In response, major players in the market are prioritizing the development of advanced software solutions to accelerate their digital transformation and overcome these obstacles. These proactive measures are expected to drive the demand for core banking software, contributing to the market's growth.

Regional Analysis

The adoption of cloud-based solutions, the rise in demand for digital banking services, and the incorporation of cutting-edge technologies are significant drivers of the Canadian central banking software market. The market is distinguished by various geographic areas, with Ontario as the biggest. Alberta, British Columbia, and Quebec are additional crucial areas. The Canada Core Banking Software market offers vendors of Core Banking Software chances to provide data analytics-related solutions that can aid small and medium-sized financial organizations. To succeed in the Canadian market, Core Banking Software providers must customize their products to meet the unique requirements of each area.

Segmental Analysis

The Canada core banking software market is segmented by solution, Service, Deployment, and end-use.

The solution is further segmented into deposits, loans, enterprise customer solutions, and others.

The enterprise customer solutions segment dominated the North American market and is expected to register a CAGR of 7.8% over the forecast period.

The segment can be further bifurcated by Service into professional and managed Services.

The professional service segment dominated the market in 2020 and is anticipated to grow at a CAGR of 9.3% over the forecast period.

Based on Deployment, the market is sub-segmented into on-premise and cloud.

The on-premise segment dominated the market and is expected to grow at a CAGR of 7.9% during the forecast period.

Based on end-use, the market is sub-segmented into banks, financial institutions, and others.

The bank's segment is expected to dominate the market, registering the highest CAGR of 9.3% over the forecast period.

Recent Developments

• March 2023- According to a new study from the world leader in financial technology FIS®, account-to-account (A2A) payments have increased globally, with the development of real-time payment systems contributing to faster, safer, and more convenient payments for customers at the checkout.
• March 2023- Fiserv, Inc. (NASDAQ: FISV), a top provider of payments and financial services technology solutions, and Central Payments L.L.C., a provider of banking as a service (BaaS), give fintech, large companies, and payment facilitators the tools they need to launch financial products and services faster and with more potential for expansion.