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A12967 | Pages: 260 | Charts: 82 | Tables: 131 |
The global cloud computing banking market was valued at $67.9 billion in 2022, and is projected to reach $301 billion by 2032, growing at a CAGR of 16.3% from 2023 to 2032.
The term “cloud computing” refers to the on-demand availability of computer system resources, most notably data storage (also known as “cloud storage”) and computing power, without the need for the user to manage these resources directly and actively. Large clouds typically have functions that are dispersed across multiple locations, with each location functioning as a data center. Cloud computing is dependent on the sharing of resources to achieve coherence. It also typically uses a “pay-as-you-go” model, which can assist in the reduction of capital expenses but may also result in unexpected operating expenses for users who are unaware of the potential risk.
The advantages of using cloud computing in the banking industry are extensive. It can help companies modernize infrastructure, scale operations, reduce costs, improve resiliency, and build new revenue streams and services. Cloud-based systems have helped banks adapt to the rise in remote working, increased customer app use, and associated security and fraud risks.
The increase in adoption of cloud-based fintech solutions by banks and rising popularity of advanced technologies is boosting the growth of the global cloud computing banking market. in addition, increase in use of digital transformation technology the positively impacts growth of the market. However, lack of technical proficiency for implementing cloud computing solutions and increasing security concerns is hampering the cloud computing banking market growth. On the contrary, increase in adoption of Artificial Intelligence based banking system is expected to offer remunerative opportunities for expansion of the market during the forecast period.
The cloud computing banking market is segmented on the basis of service model, deployment mode, application, and region. On the basis of service model, the market is categorized into infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). On the basis of deployment mode, the market is fragmented into public cloud, private cloud, and hybrid cloud. By application, it is classified into fraud detection & prevention, customer relationship management (CRM), human resource management, core banking, and others. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
[SERVICEMODELGRAPH]
In terms of service model, the software as a service (SaaS) segment holds the highest cloud computing banking market size as it provides personalized services, accelerates throughput, and reduces operational costs. However, the platform as a service (PaaS) segment is expected to grow at the highest rate during the forecast period. These services reduce management concerns efficiently with personalized assistance and optimized performance development.
[REGIONGRAPH]
Region wise, the cloud computing banking market share was dominated by North America in 2022, and is expected to retain its position during the forecast period, owing to rise in adoption of cloud computing banking in small & medium enterprises to ensure effective flow of financial activities. However, Asia-Pacific is expected to witness significant growth during the forecast period, due to the growing adoption of web-based and mobile-based business applications in the sector of banking.
The key players that operate in the market are Amazon Web Services, Microsoft Corporation, IBM Corporation, Google LLC, Oracle Corporation, Salesforce.com Inc., Alibaba Cloud Computing Ltd., VMware, SAP SE, and Dell Technologies. These players have adopted various strategies to increase their market penetration and strengthen their position in the cloud computing banking industry.
September 12, 2023: Temenos partnered with Varo Bank, N.A. Temenos Banking Cloud enables Varo to scale based on customer demands, deploy new products quickly, and drive down operational costs substantially. This has helped the bank to bring innovative products to market faster and at scale to meet the surge in digital banking.
In November 01, 2021, Kyndryl, a technology infrastructure services provider launched banking and financial industry services for Google Cloud Customers to safely store and protect their confidential and sensitive data. Moreover, it also helps financial services organizations to plan and implement their data and application environment in Google Cloud.
On March 10, 2020, Lloyds Banking Group, collaborated with Google Cloud to accelerate digital transformation. The collaboration has add Google Cloud to the Group’s portfolio of technologies, accelerating its ambition to deploy smarter technology and better experiences to its customers across the UK.
Adoption of cloud-based fintech solutions by banks to improve operational efficiency, automate processes, and addresses security concern are driving the market expansion. In addition, governments in many developing nations are investing in cloud computing delivery models due to cloud computing's ability to stream technological operations and boost government productivity. For instance, in June 2023, The Ministry of Economy (MoE), of the UAE, partnered with Amazon Web Services, Inc., a provider of cloud computing platforms, to launch the AWS Connected Community initiative which supports the digitization of small banks in the UAE.
The initiative would help SMEs expand and grow in local and international markets. Through the initiative, virtual workshops and sessions for entrepreneurs and SMEs will be conducted to enhance digital economy and technology capabilities, such as cloud computing, IoT, digital media, smart applications, Blockchain, robots, digital databases, and storage. Such demands are driving the growth of the cloud computing banking industry.
The rising popularity of the latest novel technologies like artificial intelligence (AI) and machine learning (ML) and its rapid adoption in cloud computing is empowering the growth of the global cloud computing banking market. There has been a rapid increase in technological advancements since the outbreak of the COVID-19 pandemic across the developed and the developing economies. Cloud computation is enabling the banking industry to sustain its business functions amid the rising adoption of work from a work-from-home model. Cloud computing technology enables enterprises to efficiently store, access, and manage critical data. With the rising adoption of smartphones, laptops, and the internet, the need for storing and processing huge volumes of data has significantly increased enabling enterprises to offer customer-centric services to their customers and clients.
The rising focus on customer satisfaction, the increasing need for controlling operational expenditure, and the need for controlling capital expenditure are some of the most prominent factors that are significantly driving the growth of the global cloud computing market. Data security, compliance requirements, and quick data recovery are major factors that boost the demand for cloud computing banking services across the globe.
Rapid innovation in telecom service has created a technical gap for end users, as they need to adapt to new technology infrastructures and improve their operations and business processes. In addition, the lack of skilled workforce is making it difficult for companies to plan, build, and deploy new infrastructures and focus on their core competencies, which, in turn, is hindering the growth of the cloud computing banking market. Moreover, a lack of technical proficiency while implementing cloud solutions in the telecom industry leads to reduced work efficiency & data corruption, and privacy security concerns, thus restraining the growth of the global market. In addition, the key factor challenging the growth of the market is the unavailability of skilled personnel.
The surge in cyber-attacks on financial consulting software for gaining the personal data of clients hampers market growth. Moreover, the increasing adoption of public networks supporting endpoints running on public servers without proper cybersecurity is posing a huge threat to the end users. Moreover, data security and privacy are the primary concerns of organizations, wherein storage, use, and transmission of information must be digitally protected. For instance, according to a survey by EmergingEd, about 60% of the business-sensitive information on hard drives is held insecurely. Data encryption, authorization management, access control, cloud integration, communication security, monitoring & and auditing, and business continuity services are some of the important security services offered by the vendors. For instance, vendors such as Google LLP, Microsoft Corporation, and Amazon.com Inc. provide 99.9% uptime, which relieves organizations from the burden of creating and maintaining recovery facilities and backup infrastructure, hampering the growth of the market.
The integration of specialized computing solutions as per the industry’s requirements presents a significant opportunity for the market to grow. The integration of such solutions enables more efficient and tailored processing of specific tasks. Cloud solutions providers offer specialized hardware and accelerate as services, allowing customers to access these resources without the need for large investments in hardware infrastructure. With specialized solutions, the workload be managed, and cost be optimized. Thus, as industries start focusing on integrating specialized computing solutions, the market for cloud computing solutions is expected to grow. RCH Solutions, based in the U.S. is one of the most prominent providers of specialized computing solutions. The company offers specialized solutions to help research and development teams accelerate the delivery of scientific breakthroughs, which in turn is expected to provide lucrative opportunities for the growth of the market.
Key Market Segments
Key Market Players