According to a recent report published by Allied Market Research, titled, Digital Transformation in BFSI Market by Component, Deployment Model, Enterprise Size, End User and Technology: Opportunity Analysis and Industry Forecast, 2020–2027,” the global digital transformation in BFSI Industry size was valued at $52.44 billion in 2019, and is projected to reach $164.08 billion by 2027, growing at a CAGR of 15.4% from 2020 to 2027.
Digital transformation in BFSI is a type of platform, which develops innovative technology to change traditional business process. It helps corporation to streamline back office processes like accounting and legal and to deliver product to consumer conveniently. In addition, digital transformation allows insurance and banking industries to streamline their business process and to publish product information digitally.
The key factors that drive the growth of the global digital transformation in BFSI market trends include increase in adoption of digital technology by various banks and surge in need of digital services among the fintech to enhance and to improve the customer experience. In addition, increase in customized IT solutions for specific banking need positively impacts the growth of the market. However, high implementation and maintenance cost of digital technology and security & privacy concerns related to data theft and cyber-attacks is expected to hamper the market growth. On the contrary, increase in adoption of advance technology such as AI and machine learning among the companies, is expected to offer remunerative opportunities for the expansion of the global digital transformation in BFSI market growth during the forecast period.
The big data and business analytics segment dominated the digital transformation in BFSI industry in 2019 and is projected to maintain its dominance during the forecast period, owing to its numerous benefits such as bosting customer retention rate and increase in revenue of the banking sectors. In addition to this, surge in adoption of big data analytics software by various banks and fintech to deliver enhanced & faster decision-making and to provide competitive advantage by analyzing and acting upon information in a timely manner significantly contributes toward the growth of the digital transformation in BFSI market revenue. Furthermore, the blockchain segment is expected to grow at a significant CAGR during the forecast period, owing to surge in the adoption of blockchain technology in various types of payments such as online payment, mobile payments and card payments and growth in demand for high-speed transaction processing among the customers.
Region wise, the digital transformation in BFSI market share was dominated by North America in 2019, and is expected to retain its position during the forecast period. This is attributed to early adoption of advance technology such as AI based decision making software and presence of well-established businesses in this region. However, Asia-Pacific is expected to witness significant growth rate during the forecast period, owing to rise in penetration of digital transformation in various banks and financial institution and rise in government initiatives for digital transformation in emerging countries such as China and India.
The outbreak of COVID-19 is anticipated to have a significant impact on the growth of the digital transformation in BFSI market. Various industries are majorly hit by lockdown imposed in many countries, and the spending on digital transformation by end users is expected to upsurge during this pandemic. This is attributed to the large number of customers across the globe moved dramatically toward online channels. Furthermore, rise in adoption of smartphone among the customers have led many banks to change and update their lending process owing to which there is an increase in adoption of digital transformation technology across different banks and financial institutions.
The report focuses on the growth prospects, restraints, and trends of global digital transformation in BFSI market size. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on global market.
Key Findings Of The Study
- By technology, the big data and business analytics segment accounted for a major digital transformation in BFSI market share in 2019.
- By region, North America generated the highest revenue in 2019.
- By deployment model, the on-premise segment generated the highest revenue in 2019.
The key players operating in the global digital transformation in BFSI market include, Alphasense Inc., Cognizant, FUJITSU, Google, LLC, HID Global Corporation, International Business Machines Corporation, Microsoft Corporation, Oracle Corporation and SAP SE. These players have adopted various strategies to increase their market penetration and strengthen their foothold in the industry.