The UAE core banking solutions market size was valued at $59.27 million in 2019, and is projected to reach $209.35 million by 2027, growing at a CAGR of 17.3% from 2020 to 2027.
Core banking solutions (CBS) is a bank’s centralized system, responsible for ensuring seamless workflow by automating frontend & backend processes within a bank. It can also be termed as a back-end system, which involves processing of banking transactions across various branches of a bank on a single platform. Moreover, CBS helps banks in processing deposits & withdrawals, enhancing customer relationship management activities and transactions management. Furthermore, CBS provides customers an access to banking facilities from any bank branches across a country and facilitates information across delivery channels.
Increase in adoption of core banking technologies to modernize banking functionality and increase in focus toward providing better customer services are major factors that propel the market growth in the country. In addition, core banking solutions help banks in reducing operational & support expenses, provide real-time transaction processing, and manage bank accounts using interconnected branches. These are the major driving factors for the UAE core banking solutions market growth.
However, shortage of skilled workforce, lack of awareness toward core banking solutions, and huge maintenance costs are some of the factors that limit the UAE core banking solutions market growth. Furthermore, rapid technological advancements is expected to offer significant opportunities for core banking solution providers to expand & develop their offerings in the country. In addition, rise in mergers & acquisitions (M&A) among banks, which are seeking to accelerate their existing product development processes by implementing core banking solutions, is expected to provide lucrative opportunities for the UAE core banking solutions forecast period.
By Component
Software segment accounted for the highest market share in 2019
On the basis of deployment model, the cloud segment was the fastest growing segment in 2019 and is projected to maintain its dominance during the forecast period. Moreover, surge in use of cloud computing technology through software-as-a-service (SaaS) to help banks in securing storage & transaction processing further boosts the demand for this segment.
The report focuses on growth prospects, restraints, and trends of the UAE core banking solutions market analysis. 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 the UAE core banking solutions market.
By Deployment Mode
On-premise segment is projected as one of the most lucrative segments.
Segment review
The UAE core banking solutions market is segmented on the basis of component, deployment model, enterprise size, solution type, and end user. On the basis of component, the market is bifurcated into solution and service. In addition, the services segment is further segmented into implementation & integration service, support & maintenance service, and consulting service. In terms of deployment model, it is divided into on-premise and cloud. Based on enterprise size, the market is segmented into large enterprises and small & medium enterprises (SMEs). By solution type, it is segmented into enterprise customer solutions, loans, deposits, and others. On the basis of end user, the market is segmented into banks, credit unions & community banks, and others.
The report analyses the profiles of key players operating in the market that include Capital Banking Solutions, EdgeVerve Systems Limited, Finastra, Fiserv, Inc., NCR Corporation, Oracle, SAP SE, SDK.finance, Tata Consultancy Services Limited, and Temenos Headquarters SA. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
By Enterprise Size
Large Enterprises segment is projected as one of the most lucrative segments.
COVID-19 impact analysis
COVID-19 pandemic has a significant impact on the UAE core banking solutions market, owing to increase in use & adoption of online and digitalized financial services in the country. Moreover, to curb the spread of virus, the governments have imposed lockdowns; therefore, core banking solution providers offer software-as-a-service platform, which helps banks to maintain banking operations and sustain in the market during the pandemic situation. This, in turn, has become one of the major growth factors for the UAE core banking solutions market during the global health crisis.
Top impacting factors
Surge in adoption of core banking technology
The banking industry has become a fastest adopter of technologies such as cloud computing, application programming interfaces (APIs), data analytics, artificial intelligence, robotic process automation (RPA), chatbots, machine learning, and blockchain, among others. In addition, with an implementation of core banking solutions, banks are able to perform effective customer analysis while simultaneously enabling customers to carry out their usual banking transactions effectively. Therefore, to modernize banking functionality, several banks are implementing core banking solutions to provide more integrated & value-added services. Hence, adoption & implementation of core banking solutions among banks in the country is driving the UAE CBS market growth.
By Solution Type
Enterprise Customer Solutions segment accounted for the largest market share in 2019.
Huge maintenance cost & shortage of skilled workforce
Increase in non-availability of low skilled labor, which are needed to perform highly advance tasks in the banking sector has become one of the major factors limiting the market growth. In addition, to maintain unprecedented levels of speed, accuracy, and cost efficiency, banking operations with implementation of core banking solutions are lacking in the banking industry. Moreover, high initial investments & maintenance cost of the software are expected to hamper the UAE CBS market growth in the country.
Rapid growth in technological advancements
With rapid growth in technological advancements, banks in the country are expected to have a significant opportunity to expand their offerings in the market. Moreover, several banks & financial institutions are implementing advanced technologies in their existing business processes. For instance, in 2019, SDK finance, which offers core banking software to create digital banking solutions, has projected that within the next five years, almost 90% of the UAE banks plan to have fingerprint scanning, and nearly 70% intend to implement face recognition. Furthermore, banks are expected to develop their existing business model with these technologies and are using external solutions from banking software companies in the country. Therefore, these are the major factors expected to boost the growth of the UAE core banking solutions market in the coming years.
By End User
Banks segment is projected as one of the most lucrative segments.
Key benefits for stakeholders
- The study provides in-depth analysis of the UAE core banking solutions market share along with current & future trends to illustrate the imminent investment pockets.
- Information about key drivers, restrains, and opportunities and their impact analysis on the UAE CBS market size is provided in the report.
- Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the UAE core banking solutions industry.
- An extensive analysis of the key segments of the industry helps to understand the UAE core banking solutions market trends.
- The quantitative analysis of the UAE core banking solutions market from 2020 to 2027 is provided to determine the market potential.
UAE Core Banking Solutions Market Report Highlights
| Aspects | Details |
 By Component |
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 By Deployment Model |
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 By Enterprises Size |
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 By Solution Type |
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 By End User |
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 Key Market Players | FISERV, INC., EDGEVERVE SYSTEMS LIMITED, SDK.finance, FINASTRA, SAP SE, TATA CONSULTANCY SERVICES LIMITED, CAPITAL BANKING SOLUTIONS, ORACLE, TEMENOS HEADQUARTERS SA, NCR CORPORATION |
Analyst Review
Banks in the country aim at attracting the digitally growing millennial generation by facilitating easy flow of banking activities and remote monitoring of transactional activities from any branch of the bank. In addition, the COVID-19 outbreak has a significant impact on the UAE core banking solutions market as governments have imposed lockdowns & business shutdowns and banks are looking forward to investing in technologies and expanding their offerings in the market. Moreover, to curb the spread of coronavirus, banks are adopting core banking solutions & implementing them in their existing business operations to continue providing banking services during the pandemic situation. However, a considerable number of banks perceive that they have minimum core banking solutions exposure. This scenario is changing, and 2019 has witnessed an increase in sales of core banking solutions in the country, owing to rise in mergers & acquisitions among banks & financial institutions. They are demanding core banking solutions, which has led to innovations & new trends in the UAE core banking solutions industry.
The UAE core banking solutions market is consolidated with the presence of major vendors such as SDK.finance, Fiserv, Inc. and NCR Corporation. Some key players profiled in the report include Capital Banking Solutions, EdgeVerve Systems Limited, Finastra, Oracle, SAP SE, Tata Consultancy Services Limited, and Temenos Headquarters SA. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
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