According to a recent report published by Allied Market Research, titled, “Credit Rating Software Market By Offering, Deployment Model, Enterprise Size, and End User: Global Opportunity Analysis and Industry Forecast, 2021–2030”, the global credit rating software market size was valued at $0.42 billion in 2020, and is projected to reach $1.92 billion by 2030, growing at a CAGR of 16.5% from 2021 to 2030.
Modern credit ratings are based on highly advanced primitive techniques used to access a company's creditworthiness, which is becoming credit rating software market trends. Moreover, banks have embraced credit rating software on a large scale to improve precision and consistency of credit rating analysis. Therefore, surge in demand for credit ratings to assess quality of fixed income securities is expected to boost the credit rating software market growth. Furthermore, factors such as reducing chances of bad debts for financial institutions and rise in concern among consumers for maintaining good credit score influences the market growth.
Furthermore, with lockdowns being lifted and businesses restarting, lending institutions are facing a new & unfamiliar environment, in which evaluating and monitoring credit with limited visibility and access to reliable data has become challenging factors to lenders. Therefore, there is a rise in need and adoption of credit rating software among banks, financial institutions, and other lending companies.
By end user, the banks segment acquired major market share. Banks are increasingly adopting credit rating software solutions such as real-time credit score screening, know your customer (KYC) creditworthiness, AI/ML-based fraud prevention, and real-time compliance monitoring.
Region wise, North America dominated the credit rating software market in 2020, and is expected to maintain its market position during the forecast period as consumers heavily rely on different types of loans for covering their expenditures such as personal loans, business loans, education loans, and others. Therefore, to know credit score of consumers, banks, and other financial institutions rely on credit rating software to provide loans, which propels the credit rating software market growth in this region.
However, Asia-Pacific is expected to grow at the highest CAGR during the forecast period. Growth in number of consumers relying on different types of loans in developing countries such as India, Thailand, and Vietnam have further increased the importance of credit score. In addition, credit rating software helps banks & other lenders to know actual credit score and find out credit worthiness of consumers, which is expected to boost the market growth in the region.
During the COVID-19 pandemic, consumers incurred huge losses due to sudden closure of businesses and low level of income, which led to rise in applications for loans to start new businesses or to restart existing business. However, paying back capacity of consumers has decreased during the pandemic as whole economy suffered a major loss. Financial institutions became more concerned about granting loans as chances of bad debts were higher during the pandemic. These factors promoted adoption of credit rating software among banks, financial institutions, and other lenders during the pandemic situation.
Key Findings of the Study
- By offering, the solution software led the highest credit rating software market share, in terms of revenue in 2020.
- On the basis of end user, the savings & loan associations segment is expected to exhibit the fastest growth rate during the forecast period.
- Region wise, North America generated the highest revenue in 2020.
The key players operating in the credit rating software market analysis include Abrigo, ACTICO GmbH, FICO, Fitch Ratings Inc., Loxon Solutions Zrt, Moody's Analytics Inc., Pegasystems Inc., SAP, Soft4Leasing, and Softlabs Technologies & Development Pvt. Ltd. These players have adopted various strategies to increase their market penetration and strengthen their position in the credit rating software market.