North America 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 By Country(U.S., Canada) Forecasts, 2023-2031

Market Overview

The North American core banking software market size was valued at USD 4,233 million in 2022 and is projected to reach USD 14,147 million by 2031, registering a CAGR of 14.2% during the forecast period (2023-2031).

The core business processes of a bank, including account management, client data management, transaction processing, and regulatory compliance, are all handled and automated by core banking software. The demand for Core Banking Software in North America is driven by several factors, including greater operational efficiency, the expansion of digital banking, and increasing regulatory requirements.

Additionally, the growing popularity of mobile banking and the uptake of artificial intelligence (AI) and machine learning (ML) technologies drive the market for central banking software in North America. Customers increasingly use mobile devices to access their accounts and complete transactions due to the growth of digital banking, so banks are investing in mobile banking apps to meet this demand.

Highlights

• Enterprise Customer Solutions dominate the market by solution. 
• Professional Service dominates the market by Service.
• On-premise dominate the market by deployment
• The bank segment dominates the market by end-use.

Market Dynamics

North America Core Banking Software Market Drivers:

Rise of Digital Banking

The growing use of digital banking channels like mobile and internet banking drives the market for Core Banking Software in North America. As consumers use these channels to manage their finances more frequently, banks must use digital banking technology to remain competitive. Thanks to core banking software, customers can enjoy a seamless, integrated digital banking experience from banks that includes real-time transactions, customized suggestions, and round-the-clock access to banking services.

Increasing Regulatory Requirements

Strict regulatory standards for compliance, reporting, and risk management apply to banks. These rules aim to safeguard customers while preserving the financial system's stability. However, compliance can be difficult and time-consuming, and failure to comply can result in harsh fines and harm one's image.

By offering a complete approach to regulatory compliance, Core Banking Software lowers the risk of non-compliance and the associated fines. The software provides real-time reporting and monitoring features, allowing banks to automate compliance procedures like Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. This provides a thorough audit record of all transactions, which can be used to identify and stop fraudulent activity and guarantee compliance.

North America Core Banking Software Market Restraints:

Security and Privacy Concerns

Banks are increasingly concerned about the security and privacy of client data as more financial transactions occur online and on mobile devices. Banks may suffer money losses as well as reputational harm as a result of cyberattacks and data breaches. Additionally, regulatory organizations that oversee financial institutions, such as the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), have stringent policies and harsh sanctions for data breaches. Thus, this hinders the market growth.

Lack of Skilled Professionals

Experts in software development, data management, and regulatory compliance are needed to install and keep core banking software. It may be difficult for banks to implement and maintain the software due to a need for qualified professionals in the field.

North America Core Banking Software Market Opportunities:

Growing Demand for Cloud-Based Solutions

The advantages of cloud-based Core Banking Software alternatives are cost-effectiveness, scalability, and flexibility. They also allow banks to provide their clients with faster, more seamless digital banking services. Therefore, there is a rising need in the North American market for cloud-based Core Banking Software solutions.

Regional Analysis

The United States and Canada comprise the two North American Core Banking Software industry segments. The bulk of the market share for Core Banking Software in North America is concentrated in the United States. The rising use of digital banking solutions and significant players in the area can be linked to the market's expansion in the United States.

Canada, in contrast, is a smaller market for essential banking software but is anticipated to expand rapidly over the next few years. The rising demand for cutting-edge banking solutions and the government's initiatives to support digitalization in the financial sector are both responsible for the market's expansion in Canada.

In the coming years, the demand for digital banking solutions, increased bank rivalry, and the need for high-tech security measures are anticipated to drive the growth of the North American Core Banking Software market.

Segmental Analysis

The North American 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 4.7% 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 2021 and is anticipated to grow at a CAGR of 6.2% 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 4.95% 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 6.2% over the forecast period.

Recent Developments

• March 2023- Fiserv, Inc., 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.
• 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.