Banking Credit Analytics Market Expected to Reach $4.6 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Banking Credit Analytics Market By Component (Solution, Service), By Deployment Mode (On-Premise, Cloud), By Application (Risk Management, Fraud Detection, Credit Analysis, Portfolio Management, Others): Global Opportunity Analysis And Industry Forecast, 2023-2032". The banking credit analytics market was valued at $963.84 million in 2022, and is estimated to reach $4.6 billion by 2032, growing at a CAGR of 17.4% from 2023 to 2032.

The banking credit analytics market encompasses a wide range of applications, including credit scoring, credit risk assessment, loan origination, credit portfolio management, and default prediction. It involves the analysis of various data sources, such as financial statements, credit reports, payment history, customer behavior, economic indicators, and market trends, to generate insights and predictions that can support decision-making processes related to credit risk management.

Furthermore, the use of credit analytics in banking enables financial institutions to assess and manage credit risk more effectively, improve loan decision-making, optimize credit portfolio performance, and mitigate credit losses. It also helps banks and other financial institutions comply with regulatory requirements, such as Basel III, by providing robust risk assessment and reporting capabilities. In addition, the banking credit analytics market has been fueled by the increasing availability of data, advancements in analytics technologies, and the growing need for financial institutions to make data-driven decisions in a dynamic and competitive banking landscape. 

Furthermore, major market players have undertaken various strategies to increase the competition and offer enhanced services to their customers. For instance, in February 2022, Citi, S&P global market intelligence and Oliver Wyman has entered into collaboration. Thus, because of this collaboration Citi has selected the S&P Global/Oliver Wyman's Climate Credit Analytics ('CCA') Transition Risk model to support a variety of requirements for the bank in 2022. Therefore, such strategy helps to grow the banking credit analytics market size. 

Based on deployment mode, the on-premises segment attained the highest growth in 2022. This is because the on-premise segment in the banking credit analytics market share presents a significant opportunity for banks and financial institutions to improve their credit risk management and decision-making capabilities. With on-premise solutions, organizations can retain full control over their data and analytics, enabling them to customize and fine-tune their credit risk models to fit their unique needs and preferences. 

However, the cloud segment is considered to be the fastest growing segment during the forecast period. This is due to the use of artificial intelligence (AI) and machine learning (ML) in credit analytics is becoming more prevalent, with cloud-based platforms offering scalable and cost-effective access to these technologies. Moreover, the use of artificial intelligence (AI) and machine learning (ML) to analyze large volumes of data and provide more accurate insights is another trend which is helping to boost the banking credit analytics market growth. 

By region, North America attained the highest growth in 2022. This is because with the increasing digitization and automation of financial services, there is a growing demand for advanced credit analytics solutions in North America, which provide actionable insights to banks and financial institutions. However, the Asia-Pacific region is considered to be the fastest growing region during the forecast period. This is because, the proliferation of digital technologies and the rise of fintech companies in this region have contributed to the growth of the credit analytics market, as the companies in this region often rely on data analytics to assess credit risk for online lending and other innovative financial services.

The impact of COVID-19 on the banking credit analytics market trends was predominantly negative. The pandemic led to increased uncertainties in the economy, resulting in higher credit risk and a decline in lending activities. Financial institutions faced challenges in assessing creditworthiness accurately, leading to a decrease in demand for credit analytics solutions.

However, the market also witnessed some moderate positive effects as banks and lenders sought to enhance their risk management capabilities to navigate the volatile economic environment. With the global economy experiencing unprecedented challenges, banks and financial institutions have been forced to reassess their credit risk management strategies. As a result, there has been a growing demand for advanced credit analytics tools and solutions that can help lenders better assess credit risk, monitor loan performance, and improve the overall quality of their lending portfolios. This has led to an increase in investments in credit analytics technologies, as well as a shift towards more sophisticated and data-driven credit risk management practices. However, the pandemic has also brought new challenges to the credit analytics market, such as increased credit risk for certain industries and a more volatile lending environment, which will require ongoing innovation and adaptation from credit analytics providers. 

Key Findings of the Study

• By component, the solution segment led the banking credit analytics market in terms of revenue in 2022.
• By application, the risk management segment led the banking credit analytics market in terms of revenue in 2022.  
• By region, North America generated the highest revenue in 2022.

The key players profiled in the banking credit analytics market analysis are BNP Paribas, Citigroup, CRISIL Ltd, FIS, Fitch solutions, IBM Corporation, ICRA limited, Moody's Analytics, Inc., S&P global, and Wells Fargo. These players have adopted various strategies to increase their market penetration and strengthen their position in the banking credit analytics industry.