Global Core Banking: Steady But Unspectacular Growth

by Stephen Greer,  Daniel Latimore, July 23, 2013
Industry Trends
Global

Abstract

The estimated size of the global core banking market is $8.6 billion in 2013. Celent predicts it will grow at a 4.0% rate over the next four years, reaching $10.1 billion in 2017.

In the report Global Core Banking: Steady But Unspectacular Growth, Celent details a market that remains vibrant, with healthy competition occurring in all geographies, intensified by some recent acquisitions. Based on vendor responses, follow-up conversations, internal calculations, and publicly available data, Celent estimates encompass more than 11,000 core implementations around the world.

In America, long pent-up demand for core replacement is coming to a point where a few large banks will take the plunge, and as successes proliferate, more banks will be emboldened to follow. Small US banks will migrate slowly. Europe will see a continued drip of replacements, while the faster growing, less mature regions of the world will see a higher appetite for core replacement to meet the faster-changing needs of their particular geographies.

Although bank behavior is highly dependent on geography, Celent observes three common trends around the world:

  • Banks are increasingly willing to consider core replacements, whether big bang or phased (which depends on size).
  • Cost and customer demands for agility are key drivers motivating banks to finally make the switch.
  • Vendor products have matured enough that the trepidation banks have typically felt may no longer be warranted.

Despite these trends, bankers are by nature a rightfully cautious lot. Momentum for change is beginning to build, but we’re not yet seeing a headlong rush toward core replacement.

“A growing number of banks are at the point where pressures on the business are sufficient to convince them that it’s time to undertake a core replacement. It is, however, a small and steady stream—not a flood,” says Dan Latimore, Senior Vice President of Celent’s Banking Group and coauthor of the report.

“Geographical differences are particularly striking,” adds Stephen Greer, Analyst with Celent’s Banking Group and coauthor of the report. “We’re beginning to see many vendors starting to make inroads in new geographies as they build off the strength in their traditional markets.”

This report examines the global core market banking, exploring geographic specifics and calculating the size of the current market and growth rates through 2017.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

Global Core Banking Market: A Diverse Landscape

2

 

Key Trends

3

 

Geographic Breakdowns

5

 

Vendors Analyzed

6

 

Global Comparison

7

Geographic Market Overview

12

 

North America

12

 

Western Europe

15

 

Asia-Pacific

18

 

Eastern Europe, Middle East, and Africa (EEMEA)

21

 

Latin America

24

Core Banking Market Size Estimates

28

 

Initial Estimates

29

 

Geographic Demand

29

 

Price Estimates

30

 

Market Valuation

31

Conclusion

34

Leveraging Celent’s Expertise

35

 

Support for Financial Institutions

35

 

Support for Vendors

35

Related Celent Research

36

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