Global Core Banking Software Market 2025 – 2034

Reports Description

As per the Core Banking Software Market analysis conducted by the CMI Team, the global core banking software market is expected to record a CAGR of 15.3% from 2025 to 2034. In 2025, the market size is projected to reach a valuation of USD 17.94 Billion. By 2034, the valuation is anticipated to reach USD 64.65 Billion.

Core Banking Software Market Overview

Core banking software solutions are at the heart of modern financial institutions, providing an interface to manage all aspects of banking via branches and digital channels. Core banking software solutions can handle a range of functions, ranging from account management and balance inquiries to processing transactions (credits and debits) and supporting loan servicing and compliance reporting.

Core banking solutions have recently evolved from supporting basic retail banking functions to include advanced features like cloud deployment, real-time data processing, APIs, etc., to support digital banking and new products, such as mobile wallets and open banking.

The global growth of core banking software is driven by the need for operational efficiencies, enhanced customer experiences, and regulatory compliance. There have been significant public and private investments globally to upgrade old legacy systems into agile, scalable platforms in many of the core banking markets, such as North America, Europe, and Asia-Pacific. Large core banking vendors like Temenos, Oracle, and Finastra are supporting these investments in innovation by offering modular platform architectures in cloud-native platforms that can be used to support retail, corporate, and micro finance sectors.

As financial ecosystems persistently become the nexus for financial services, core banking software is essential for allowing banks to deliver personalized and secure omni-channel services. Constant evolution of AI, blockchain, and cybersecurity within core banking software solutions has and will continue to transform the way banks engage with customers and manage risk in an ever-increasing digitally centric world.

Moreover, according to the IDC COVID-19 Impact Report, fewer than 20% of financial institutions worldwide have returned to a “new normal.” The study also highlights that 89% of banks in North America and 83% in Europe and the Middle East & Africa (MEA) are prioritizing efforts to enhance operational resilience. Meanwhile, 77% of banks in the Asia-Pacific region where the pandemic’s effects were felt earlier have already shifted their focus back to innovation and the implementation of core banking solutions to support long-term digital transformation initiatives.

Core Banking Software Market Key Growth Drivers

The core banking software market Trends has tremendous growth opportunities due to several reasons:

• Increasing demand for digital transformation in banking operations: The transformation of banking operations across the globe continues to accelerate at a rapid pace as evolving customer expectations and competitive challenges force banks to digitize their operations. Digital transformation is the use of modern day, digital core banking systems software, enabling banks to offer services to customers online and through mobile banking apps while increasing customer expectations for immediate transactions. As banks transition away from their legacy systems and transition towards agile, cloud core banking solutions, banks are realizing operational efficiencies, new revenue opportunities, and improved customer engagement. All of these developments are also enabling banks to innovate products and launch them faster, personalize customer experiences, and engage the fintech industry. Rising consumer demand for cashless transactions and de-banking, accelerated by COVID-19, has led financial institutions to realize the need for digital change, which is fundamentally shifting the entire banking landscape. Overall, digital transformation has established itself as a significant driver of growth for the core banking system software market. For instance, in May 2024, Temenos unveiled a novel Generative AI solution for the banking platform. This solution can be integrated with Temenos Core and Financial Crime Mitigation (FCM) solutions. Integration of Generative AI technology will transform the way banks relate with their data and enhance profitability and productivity to realize substantial return on investment.

• Growing adoption of cloud-based core banking solutions: Adoption of cloud-based core banking systems continues to rise rapidly as cloud technology itself provides a means for banks to scale and unify systems while promoting a cost-effective approach to modernizing antiquated core banking systems. Cloud-based core banking systems facilitate real-time information sharing, allow banks to reduce expenditure on infrastructure, and offer rapid deployment of new capabilities. The shared cloud environment supports real-time integrations with third-party fintech through Application Program Interfaces (APIs), which promote easier experiences, innovation, and improved customer engagement. For instance, in January 2023, Kenya-based fintech company Kwara acquired IRNET Coop to deploy a cloud-based core banking platform. This acquisition also provided access to IRNET’s existing consumer base, as it was a subsidiary of the Kenya Union of Savings and Credit Cooperatives (KUSCC). Such advancements aim to accelerate cloud adoption among enterprises, offering comprehensive banking functionalities to consumers. In addition, cloud-based core banking systems help support remote banking channels as well as disaster recovery for continuity of services, allowing banks to have the flexibility of using resources when needed and paying for usage through a subscription or pay-as-you-go approach, which promotes banks of all sizes to begin a cloud journey, contributing to the overall market growth.

• Rising need for real-time transaction processing and instant payments: Consumers and businesses increasingly expect fast and efficient payment solutions that process transactions instantly. Real-time transaction processing is essential for enabling immediate fund transfers, reducing fraud risks, and improving liquidity management. Core banking software is evolving to support instant payments, real-time balance updates, and 24/7 transaction capabilities. This is critical in enhancing customer satisfaction and staying competitive as digital payment ecosystems grow. Furthermore, regulatory bodies across many countries are mandating faster payment systems, pushing banks to upgrade their infrastructure. The demand for real-time processing drives banks to invest heavily in advanced core banking platforms that can handle high transaction volumes securely and efficiently.

• Rapid growth of mobile and internet banking users worldwide: The global surge in smartphone penetration and internet access has revolutionized banking, shifting the majority of transactions to digital channels. Mobile and internet banking offer convenience, speed, and 24/7 access, driving customers away from traditional branch visits. Core banking software must support this digital shift by enabling secure, scalable, and user-friendly online platforms. Banks are investing in enhancing mobile app capabilities, integrating biometric security, and offering personalized digital services to meet customer demands. This growth in digital users creates immense pressure on banking systems to handle increased traffic, ensure uptime, and deliver seamless omnichannel experiences, which in turn fuels demand for sophisticated core banking solutions.

Core Banking Software Market Key Threats

The core banking software market has several primary threats that will influence its profitability and future development. Some of the threats are:

• High costs of implementing and maintaining core banking software: Implementing core banking software is a complex and costly undertaking that often involves substantial upfront costs for software licenses, infrastructure, and personnel (whether internal or contracted). Various costs are incurred in systems customization and configuration, integration with legacy systems, staff training, and maintenance of the system going forward. For smaller banks and financial institutions, these costs can be considered burdensome and stifle their ability to adopt modern core systems. There is also the added costs of frequent system upgrades and security updates to include in operational costs. These costs can weigh on return on investment periods, and result in banks justifiably pushing back necessary updates. In conjunction with the many challenges banks face with regard to market performance, the costs associated with modern core banking systems limits market growth especially in developing markets and countries, where cost management is critical and where budgets for digital transformation initiatives compete with all other spending priorities.

• Integration challenges with existing banking systems: Many banks are still heavily reliant on legacy systems that have typically taken decades to develop, and often times existing systems may not be compatible with new core banking software. When some banks want to implement new systems, they are bound by the need to find ways to integrate their new technologies with their old ones. Many Google searches will pop up integration challenges like systems interoperability and data migration issues to be faced as well as other problematic possibilities such as service interruptions. More complex integrations require more planning and more testing and fundamentally increase the potential for higher costs in the implementation of new core banking solutions, as the rollouts in legacy environments are not quick projects. Due to fear of service interruptions and reduced customer service, few banks wish to entertain operational downtime that could threaten the institution’s customer base, therefore adversely affecting customer relationships. Even organizations meant to embrace the transition from paper to digital formats can also minimize opportunities for full integration and implementation until some level of integration or a complete legacy replacement is consequently made easier.

Core Banking Software Market Opportunities

• Increased use of AI-driven automation within banking processes: Artificial Intelligence (AI) has transformative potential for core banking software through automating a number of core banking processes, such as transaction monitoring, fraud detection, and using chatbots for customer service inquiries. For example, AI-enabled analytics can help banks understand their customers at a deeper level and enhance how banks personalize and tailor solutions and manage risk. Additionally, automation leads to reduced manual errors, improved operational efficiencies, and shorter processing times, becoming an overall more efficient approach. The emphasis on digital transformation by banks will lead to AI systems being a major differentiator for core banking platforms. This trend provides tremendous opportunity for software vendors who develop computer-based systems or intelligent and adaptive systems that streamline workflows and improve decision-making. The advancement of AI capabilities is evolving and poised to change core banking, adoption rates are likely to increase in banking due to market opportunities resulting from appropriate AI integration.

• Ongoing demand for API-based platforms enabling open banking (banking-as-a-service): Open banking, as made possible through the use of APIs (application programming interfaces) to facilitate banks sharing customer data with third-party services, enables banks to share customers’ data securely enabling innovation and experiences and quality customer experience. Core banking software utilizing APIs offers constant connectivity and integration with fintech applications for payments and custom fintech services that provide innovative ways for aggregation of tools, will increase the prevalence of open-banking software applications. As stated before, banks can generate new revenue streams through partnerships and integration throughout the ecosystem in the case of open banking. Banks can offer unique and tailored types of products through or enhanced customer loyalty and retention and ways for banks to remain relevant and competitive. As regulatory environments continuously promote open banking around the world demand for core platforms that utilize AI and enable banking services in an open banking context has longstanding opportunity for software vendors that build easy to use flexible banking solutions, the demand for these types of services will continue to grow in the market. 

• Expansion into underbanked and unbanked populations through digital banking: A significant global population remains underserved by traditional banking, especially in emerging markets. Digital core banking solutions facilitate financial inclusion by enabling remote account opening, mobile banking, and micro-lending services. Governments and NGOs actively promote digital financial services to bring these populations into the formal economy. Core banking software providers have the opportunity to develop scalable, low-cost platforms tailored to the needs of underbanked communities, supporting features like multilingual interfaces and offline functionality. This expansion addresses a large, untapped market segment, driving growth while supporting social and economic development goals worldwide.

Core Banking Software Market Category Wise Insights

By Component

• Solution: Core banking software solutions are integrated platforms for banking functions such as transaction processing, account management, lending, deposits, and compliance. Core banking software solutions help to improve operations and reduce costs, while providing real-time banking capabilities. Core banking software solutions can provide APIs across banking services, provide automation features of customer service, allow for seamless mobile banking and provide AI-based analytics. Financial Institutions are shifting to modular solutions that are flexible and scalable to the changing customer needs and regulatory conditions. Demand for flexible first digital banking solutions continues to increase rapidly due to the desire to replace legacy systems and consumers demand for better and faster seamless solutions.

• Service: Core banking software service offerings include consulting, implementation, integration, maintenance, and support services. Services support banks in the process of transitioning from legacy systems to modern core platforms. Service providers assist organizations in customizing software solutions to meet specific business needs, while ensuring regulatory compliance with local governing laws. Training bank staff is another service offering supportive of operational efficiency. Another key part of servicing banking software solutions is ongoing support, including software updates, security patching, troubleshooting, etc. Demand for managed and cloud-based service solutions is growing rapidly, as banks increasingly look to optimize IT expenditures and enhance customer experience, especially for small and mid-sized financial institutions with limited IT resources.

By Deployment

• Cloud: Adoption of core banking software based in the cloud is a developing trend in the increase of bank and alternative financial institutions, potential to scale-up quickly, flexibility and reduced initial costs is an attractive premise. Cloud gives opportunity for institutions to launch and scale their services quickly, with no significant physical infrastructure investment. Cloud-based solutions facilitate continual updates, real-time data processing, and integration via APIs, which are all core to digital banking. Cloud-based software delivery is a popular preference for challenger banks, fintech, and institutions in emerging markets. There are also disaster recovery and data protection advantages when using cloud platforms, managed by reliable providers. Under the new notion of digital transformation, and increasing speed of transformation, core banking software based on the cloud will become the standard in the market moving forward.

• On-premise: On-premise systems for deploying core banking software requires installation and paging through one’s own IT systems for their core banking software platform. While this provides control and new levels of flexibility with data and customizations, it creates a huge investment and resource commitment with ongoing maintenance and updates. Many large banks and established banks have existing IT departments and structured processes, they likely prefer this model for compliance, and data governance reasons. On-premise software based on existing legacy systems has strong integration capability, but they generally have limited flexibility and scalabilities compared to cloud-based systems. As regulations and customer expectations evolve towards the use of more digital services, banks continue to transition on-premise solutions to become hybrid organizations or transitioned to cloud-based solutions.

By End Use

• Banks: Banks are the primary entity using core banking software, as core banking applications manage day-to-day operations which includes managing customer accounts, payments to customers, loan processing, and financial reports. Core banking enables centralized control and real-time data across branches and digital banking channels and competition from digital-only banks and financial technology firms is driving traditional banks to modernize their core systems to be improve infrastructure efficient, provide customers with good experiences, and to mobilize mobile-first services. Traditional banks are being forced to modernize their core banking systems to support the growing demands of digital banking, security concerns, and regulatory compliance as they adopt core banking software upgrades across retail, commercial, and cooperative banking institutions throughout the world.

• Financial Institutions: Financial institutions such as credit unions or stores, microfinance organizations, or non-banking financial companies (NBFCs), also utilize core banking software. Financial institutions expect core banking software to provide functionality to help them operate effectively, particularly as they can be more value-driven than traditional banks. Financial institutions consider core banking software cost-effective, modular, supporting digital onboarding, loan processing flows, and process improvement in meeting regulatory requirements. As many financial institutions further develop services to unbanked and underbanked populations, particularly in developing economies, core banking can improve efficiencies, customer data management, and scalability when they seek to serve the customer by a financial institution. As digital transformation continues and financial inclusion programs develop, financial institutions have incentives to adopt core banking cloud capabilities into their operations, while the increasing demand for digital and mobile-native customers continue, they are furthermore encouraged to use core banking applications to meet the needs of their customers based on easily deployable and maintainable cloud systems without a robust IT architecture.

• Others: The Others category includes fintech startups, digital wallet providers, neobanks, and government financial bodies that utilize core banking platforms to manage financial operations. These entities typically need highly agile, API-enabled platforms that support rapid deployment of new services like buy-now-pay-later (BNPL), real-time payments, and peer-to-peer transactions. Many of these organizations operate with a digital-first or mobile-only approach, requiring lightweight, cloud-native core banking systems. This segment is expanding quickly as new financial models and products emerge, particularly in underserved regions and digitally advanced economies seeking alternatives to traditional banking.

Core banking software Market Impact of Latest Tariff Policies

The global tariff landscape has created new challenges and opportunities for the core banking software market. Tariffs on the technology products and software licenses used in certain regions have increased vendor costs, which can adversely affect vendor prices and profit margins.

These changes have compelled companies to reconsider their supply streams and decisions to source products, and many are now seeking more local partnerships or producing software in the regional footprint to minimize reliance on imports and lessen the additional tariff burden. While these trends serve as a hindrance to previously established supply chains, regulations are beginning to present some positives

On the one hand, governments are lowering tariffs or creating incentives for digital infrastructure to encourage financial technology adoption. These initiatives push banks and other financial institutions to replace their legacy core banking systems and technology with new and innovative cloud-based software platforms. This trend opens up the marketplace for newer technology providers, as financial institutions will not only want to upgrade their existing technology to add new features but also to become part of an initial trend of modernization and renew their platforms once again.

Tariff policies that collate with regulatory objectives of digital transformations are prioritising tariff changes to create windfall opportunities for disruptive software suppliers entering the market – especially in emerging economies that seek to develop, and value their focus on financial inclusion.

Increased tariff complexities are catalysing core banking software companies to localize locally, minimizing costs, and aligning more closely with governments developmental initiatives. Ultimately, the impact of tariffs will increase operational costs for core banking software companies in the short run, but also create further diversity in the marketplace as a by-product of innovation as firms seek to create relationships that establish or strengthen their global footprint.

Report Scope

Core Banking Software Market – Regional Perspective

The core banking software market can be divided across different regions such as North America, Europe, Asia-Pacific, and LAMEA. This is a cursory overview of each region:

• North America: The core banking software market is seeing the most growth in North America, with their many banking institutions and a well-established digital banking environment. U.S. and Canadian banks and credit unions are investing heavily in transforming their legacy applications and infrastructure for digital transformation, unique customer experiences, and cybersecurity amongst other reasons. North America is home to many fintech companies that are in a mad dash to establish partnership agreements with traditional banks. Enrolment in regulatory, open banking, and cloud adoption by traditional banks will enhance rapid growth in the core banking software market. High consumer expectations and an established infrastructure creates a marketplace of innovation for core banking technologies and incorporates all the technology that is available for consumers in North America.

• Europe: Europe is and will be a key marketplace because of regulatory open banking initiatives (i.e., PSD2) and neobanks that will have an impact on the core banking software market. The UK, Germany, and The Netherlands are making strides in advanced digital platforms due to customer adoption, including rapid growth in digital payments, but slow fintech engagement from traditional banks. European banks are looking at API integrations, digital wallets and omnichannel capability as place holders for their customers. The European banking sector is consolidating, which will create core modernization projects. Additionally, the presence of prominent core banking software providers and increased investment in fintech make Europe a competitive and rapidly evolving landscape for core banking innovation.

• Asia-Pacific: Asia-Pacific is one of the fastest-growing regions in the core banking software market due to rapid digitalization, financial inclusion initiatives, and the expansion of digital banking services. Countries like India, China, Singapore, and Australia are investing heavily in fintech infrastructure. Governments and banks are working together to improve access to banking services in rural and underserved areas, creating demand for scalable and flexible core banking solutions. Cloud adoption and mobile-first strategies are prevalent, especially among digital-native and challenger banks. The region’s dynamic financial ecosystem and large unbanked population present significant opportunities for core banking software providers.
• LAMEA: The LAMEA region shows promising growth potential in the core banking software market, driven by increasing digital adoption and financial sector reforms. In Latin America, countries like Brazil and Mexico are modernizing outdated banking infrastructure and embracing fintech collaborations. In the Middle East, nations like the UAE and Saudi Arabia are investing in digital transformation as part of national economic diversification plans. Africa, with its large unbanked population, is rapidly adopting mobile banking and digital financial services. Core banking solutions in this region are focused on scalability, affordability, and the ability to operate in low-connectivity environments.

Core Banking Software Market Key Developments

In recent years, the core banking software market has experienced several crucial changes as the players in the market strive to grow their geographical footprint and improve their product line and profits by using synergies.

• In March 2025, Fiserv, Inc., a leading provider of payments and financial services technology, acquired Payfare Inc., a program management technology provider. This acquisition is expected to significantly strengthen Fiserv’s capabilities in delivering embedded financial solutions, enhancing its market presence in digital banking and real-time payment ecosystems.

• In February 2025, Al Rayan Bank, one of Qatar’s largest financial institutions, selected Finastra to implement a tailored core banking solution. The move supports Al Rayan’s technology transformation goals by delivering enhanced operational efficiency and a seamless customer experience through advanced digital infrastructure.

• In January 2025, Infosys Finacle, a wholly-owned subsidiary of Infosys under EdgeVerve Systems, launched the Finacle Asset Liability Management Solution. This risk management platform provides banks with an enterprise-wide view of balance sheet exposures, facilitating better financial decision-making and regulatory compliance.

• In January 2025, Intellect Design Arena Ltd formed a strategic partnership with Coforge. The collaboration leverages Intellect’s next-generation platforms, eMACH.ai and iTurmeric, to assist financial institutions in modernizing core banking systems with minimal disruption and improved speed-to-market.

• In January 2025, Intellect Global Consumer Banking (iGCB), a division of Intellect Design Arena, upgraded its eMACH.ai card platform by integrating Thales payShield HSM. This enhancement introduces an additional layer of security and authentication to support next-generation data protection and fraud prevention for banks and financial institutions.

• In December 2024, Fiserv, Inc. extended its collaboration with COCC, a fintech company servicing over 200 credit unions. Through this partnership, COCC will utilize Fiserv’s Experience Digital (XD) platform to deliver cutting-edge digital banking experiences, emphasizing innovation and customer-centric services.

• In October 2024, INDEXO, a Latvian financial services provider, launched a new comprehensive banking experience powered by Mambu’s cloud-native banking platform. This digital-first initiative enhances services in everyday banking and consumer lending, advancing financial accessibility and personalization in Latvia.

These important changes facilitated the companies to widen their portfolios, to bolster their competitiveness, and to exploit the possibilities for growth available in the core banking software market. This phenomenon is likely to persist since most companies are struggling to outperform their rivals in the market.

Core Banking Software Market Competitive Landscape

The core banking software market is highly competitive, with a large number of product providers globally. Some of the key players in the market include:

• Edgeverve Systems Limited (Infosys)
• Temenos Headquarters SA
• Oracle Corporation
• Fidelity National Information Services
• Tata Consultancy Services Limited
• Fiserv Inc.
• Intellect Design Arena Ltd
• Finastra International Limited
• Mambu GmbH
• 10x Banking Technology Limited
• finance
• Backbase
• nCino
• SAP SE
• CGI
• Alkami Technology
• Jack Henry & Associates
• DeshDevs
• Securepaymentz
• Sopra Banking Software
• Others

These companies differentiate themselves through digital-first banking platforms, AI-powered decision-making tools, and modular, cloud-native solutions. Many of them are focusing on platform-as-a-service (PaaS) and composable architecture to provide scalable and customizable solutions for banks of all sizes. For example, Temenos and Mambu offer low-code core systems designed for rapid deployment and agile banking experiences.

Strategic collaborations and regional expansion remain critical tactics. Infosys Finacle’s partnerships in Asia and Africa have expanded its reach in emerging markets, while Fiserv’s alliances with U.S. credit unions demonstrate its commitment to localized digital transformation. In early 2025, Intellect Design Arena partnered with Coforge to deliver composable core systems that support financial institutions’ modernization with minimal disruption.

Acquisitions and product enhancement are also shaping the market. Oracle and Finastra continue to integrate AI and machine learning into their core platforms, enhancing predictive analytics and real-time insights. FIS, through targeted acquisitions, is building out its cloud and embedded finance capabilities to stay ahead in the rapidly evolving digital banking landscape.

The competitive edge is shifting from traditional infrastructure-based advantages to API ecosystems, omnichannel experiences, and regulatory-ready platforms. Players are also emphasizing financial inclusion, offering tailored solutions for microfinance, Islamic banking, and underserved communities across Asia-Pacific, the Middle East, and Africa. This blend of innovation and localization is redefining competition in the core banking software market, making adaptability and customer-centric design the new benchmarks for success.

The Core Banking Software Market is segmented as follows:

By Component

• Solution
• Service

By Deployment

• Cloud
• On-premise

By End Use

• Banks
• Financial Institutions
• Others

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America