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Reconciliation Software in Banking Market

Reconciliation Software in Banking Market Size, Share & Trends Analysis Report By Deployment Type (On-premise, On Cloud), By Functionality (Matching Engine, Exception Management, Reporting and Analytics, Financial Control, Automation, Other) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Report Code: SRTE17DR
Study Period 2020-2032 CAGR 13.12%
Historical Period 2020-2022 Forecast Period 2024-2032
Base Year 2023 Base Year Market Size USD XX Million
Forecast Year 2032 Forecast Year Market Size USD XX Million
Largest Market North America Fastest Growing Market Europe
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Market Overview

Global reconciliation software in banking market size by on cloud deployment is expected to grow at CAGR 13.12% during the forecast period 2024–2032.

In an accounting system, reconciliation is the process of verification that ensures two sets of records are in agreement. Banking is a challenging industry with respect to reconciliation and close management practices. The high amount of transaction volumes, process complexity, accretion of data sources, dynamic regulatory requirements, and other factors fuse to create some of the most intricate and cumbersome reconciliation processes present today.

Market Dynamics

Market Driver

Regulatory Compliance

The adoption of reconciliation software has been driven by the growing complexity and rigor of financial transaction surveillance. Banks are required to abide by a number of rules, such as anti-money laundering regulations, and know their customers require accurate and fast information checks. Banks need compliance software in order to maintain compliance requirements, as failure can result in hefty fines and damage to their brand. According to the Financial Stability Board, the cost of non-compliance can be substantial, with global banks paying over US$320 billion in fines since the 2008 financial crisis.

Operational Efficiency

One major factor driving the need for reconciliation software in the banking sector is the need for increased operational efficiency and cost savings. Automated reconciliations do cut down manual labor, lower error occurrences, and speed up the overall reconciliation process. Consequently, this gives a chance to better deploy resources, lets them concentrate on strategic tasks instead of doing time-consuming manual ones, and thus promotes heightened efficiency, which in turn leads to greater customer satisfaction and a competitive edge. According to a survey conducted by the Association for Financial Professionals (AFP), automating payment reconciliation can result in up to 50% less time being spent on manual processes.

Market Restraint

Complexity of Integration

Reconciliation software integration with current legacy systems can be difficult and time-consuming. It can be difficult to integrate systems seamlessly because banks frequently use a combination of old and new technologies. The intricacy of incorporating novel software into diverse pre-existing platforms and guaranteeing compatibility can pose a noteworthy obstacle, conceivably postponing the execution phase and impacting the comprehensive efficiency enhancements anticipated from the reconciliation software. For instance, The global average cost of a data breach in 2023 was USD 4.45 million, a 15% increase over 3 years.

Market Opportunity

Shift towards cloud-based software

The transition to cloud-based reconciliation software presents numerous opportunities for banks. Banks can manage reconciliation procedures more affordably, scalable, and flexiblely thanks to cloud-based technologies. Furthermore, cloud-based solutions enable remote access and collaboration a useful feature considering the banking industry's current shift toward digital transformation and remote work. For instance, 98% of organizations are using some form of cloud computing, up from 91% in 2020.

Regional Analysis

Geographically, the global Reconciliation Software in Banking market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa (LAMEA).

North America is holds the largest share of the global reconciliation software market. This is attributed to technological advancement in banking operations, increasing number of transactions as result of digital payment services and growth of virtual cryptocurrency aided by blockchain technology.

According to the European Banking Federation (EBF), around 6500 banks and 2 lakh branches were present in the European Union in 2017. Per day around 305 million cashless payments are transacted in the union. EBF has also reported that European banks have invested €18 billion in software. This magnanimity of the operations in the banking industry and favorable growth rate in the future validates the affirmative growth for reconciliation software market.

In Asia Pacific, driven by thriving economic prospects, the banking sector in the developing markets remained stable even during the worst phase of the 2008 crisis. Even in the coming years, banks in the emerging markets are expected to drive the growth of the global banking industry. According to the World Bank’s report, 51.4 crore bank accounts opened from 2014-2017 globally, 55% of them were from India. Deep integration of innovations and information technology into banking business by Chinese private banks like Shenzhen QianhaiWeBank would enable high quality, more efficient financial services available to a large number of individuals and MSEs.

The financial crisis of 2008 depicted differences that exist between the performance of the banking sectors of emerging and developed markets. The banking industry in the emerging market of Latin America remained fairly resilient during the crisis and registered a growth rate of around 40.1%. This performance highlights the rising importance of banks from emerging economies on the post-crisis financial landscape. Given the huge growth potential that the emerging markets offers, this trend can be anticipated to grow even stronger in the future.

Report Scope

Report Metric Details
Segmentations
By Deployment Type
  1. On-premise
  2. On Cloud
By Functionality
  1. Matching Engine
  2. Exception Management
  3. Reporting and Analytics
  4. Financial Control
  5. Automation
  6. Other
Company Profiles API Software Limited (U.K) Automation Anywhere (U.S.) BlackLine Inc. (U.S.) BoradRidge (U.S.) Cashbook (Ireland) Datalog Finance (Switzerland) Duco (U.K) FIS Intellimatch (U.S.) Fiserv Inc. (U.S.) Gresham Technologies (U.K) Open Systems Inc. (U.S.) Oracle Corporation (U.S.) RecortArt Inc.(U.S.) Rimilia (U.S.) SmartStream Technologies Ltd. (U.K) Treasury Software Corp. (U.S.) Trintech Inc. (U.S.) Xero Limited (New Zealand)
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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Segmental Analysis

Global reconciliation software in banking market has been segmented majorly on the basis of deployment type and functionality.

Based on deployment type, market is segmented into on-premise and on cloud. Increased concern among the banking enterprises regarding the data security features of reconciliation software is expected to propel the market growth during the forecast period, 2018–2025. For instance, deployment of reconciliation software on the cloud would be vulnerable to security control because data and software reside in the hand of the vendor and not the customer. However, the risk of information leaks could result in manipulation of data. Large banks are adopting cloud-based infrastructure mainly to divest their expenditure in server hardware. In terms of cost, lower upfront cost and storage cost has helped the growth of the cloud services to grow at a rapid pace. Extra storage can be added with no hardware to purchase.

While depending upon the functionality, market is segregated into matching engine, exception management, reporting and analytics, financial control, automation, and other. Transaction matching can be defined as the process of comparing and allocating the transactions between two data sets for the given period of time. It also includes an examination of the exceptions, identifying the errors and open posts to be reported. Transaction matching can be processed on the daily, weekly, or monthly basis. Additionally, it also matches all the transactions on bank statement to that of registered transactions on the bank account of the system. In the banking sector, several challenges in transaction matching can’t be overlooked. Exception matching process is a time-consuming and tedious work without the proper tools. The aim of exception management as a reconciliation tool is to provide an integrated view of all exceptions by class, giving the business user the ability to manage the risk better. It also provides the ability to penetrate into all types and down to individual transactions to examine and settle the exceptions.

Market Size By Deployment Type

Market Size By Deployment Type
  • On-premise
  • On Cloud
  • Key Players

    Reconciliation Software in Banking Market Share of Key Players

    Reconciliation Software in Banking Market Share of Key Players
    API Software Limited (U.K) Automation Anywhere (U.S.) BlackLine Inc. (U.S.) BoradRidge (U.S.) Cashbook (Ireland) Datalog Finance (Switzerland) Duco (U.K) FIS Intellimatch (U.S.) Fiserv Inc. (U.S.) Gresham Technologies (U.K) Open Systems Inc. (U.S.) Oracle Corporation (U.S.) RecortArt Inc.(U.S.) Rimilia (U.S.) SmartStream Technologies Ltd. (U.K) Treasury Software Corp. (U.S.) Trintech Inc. (U.S.) Xero Limited (New Zealand) Others

    Frequently Asked Questions (FAQs)

    How big is the reconciliation software in banking market?
    Global reconciliation software in banking market size by on cloud deployment is expected to grow at CAGR 13.12% during the forecast period 2024–2032.
    Europe has the highest growth in the global reconciliation software in banking market.
    Key verticals adopting the reconciliation software in banking market include: API Software Limited (U.K), Automation Anywhere (U.S.), BlackLine Inc. (U.S.), BoradRidge (U.S.), Cashbook (Ireland), Datalog Finance (Switzerland), Duco (U.K), FIS Intellimatch (U.S.), Fiserv Inc. (U.S.), Gresham Technologies (U.K), Open Systems Inc. (U.S.), Oracle Corporation (U.S.), RecortArt Inc.(U.S.), Rimilia (U.S.), SmartStream Technologies Ltd. (U.K), Treasury Software Corp. (U.S.), Trintech Inc. (U.S.), Xero Limited (New Zealand)


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