U.K. Core Banking Software Market Size, Share & COVID-19 Impact Analysis, By Deployment (SaaS/Hosted and Licensed), Banking Type (Large Banks, Midsize Banks, Small Banks, Community Banks and Credit Unions), and By End-user (Retail Banking, Treasury, Corporate Banking and Wealth Management), 2023-2030

The U.K. core banking software market size is projected to grow at a CAGR of 16.5% during the forecast period.

The U.K. has witnessed a prominent rise in the adoption of core banking software by financial institutions. In 2020, U.K.’s Financial Conduct Authority (FCA) proposed a new guideline on cloud computing technology. The adoption of cloud technology helps banks and financial institutions to perform their operations efficiently and reduces operational cost.

LATEST TRENDS

Significant Adoption of Digital Technology to Propel Market Expansion

The growing adoption of digital banking in the U.K. would open the core banking software market to a large number of core banking platform suppliers. The software provides business swiftness to financial institutions, giving them an edge to compete in highly competitive and complex market. The development of products using modern core banking system architecture helps banking systems to build a transparent, efficient, and inclusive financial system. This architecture is cloud-native, which offers lower operating and maintenance cost, due to less dependence on hardware. For instance, in May 2022, SaaScada, a U.K. based cloud native core banking platform provider, has raised USD 3 million from over ten investors for seed funding. Through this amount, the company aims to develop new products and features for core banking platforms.

DRIVING FACTORS

Rise in Number of Acquisitions to Drive the Market Growth

Multiple banking infrastructure and payment services providers are engaged in mergers and acquisitions to provide efficient services to fintech companies. For instance, in March 2022, LHV U.K., a banking infrastructure provider, acquired core banking software start-up Tuum. Through this acquisition, LHV U.K. aimed to upgrade its core banking platform.

Further, in April 2022, Oxbury Bank, a start-up bank in the U.K., acquired core banking software provider Naqoda to strive with new start-ups and legacy vendors. Thus, the rise in significant numbers of acquisition activities in the country would drive the U.K. core banking software market growth at a rapid pace.

RESTRAINING FACTORS

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Security Concerns Associated with Banking Systems May Hinder the Market Growth

Core banking systems are associated with many bank services and the complexity in the interface may create opportunity for hackers to do malicious activity, which may cause financial damage. Core bank banking software is not able to offer operational flexibility at a large scale, which may cause data breach related risks.

Total U.K. fintech investment plunged almost threefold from USD 27.8 billion in the first half of 2021 to USD 9.6 billion in the same period in 2022. According to KPMG, despite a downfall in the U.K. fintech investment compared to 2021, the U.K. attracts more funding compared to other countries including France, Germany, Brazil, Canada, and China combined.

KEY INDUSTRY PLAYERS

In terms of the competitive landscape, the market shows the presence of established and emerging companies. Finastra International Limited dominated the U.K. market in 2022. The company's next gen core banking platform drives innovation with agility of the cloud while consecutively increasing the market share. The company focuses on offering better functionalities and improving customer experience.

Some of the other companies with a considerable presence in the U.K. market include Oracle Corporation, Temenos AG, Tata Consultancy Services Limited, SAP SE, Mambu GmbH, Tuum, and SaaScada.

LIST OF KEY COMPANIES PROFILED:

• Finastra International Limited (U.K.)


• SaaScada (U.K.)


• Oracle Corporation (U.S.)


• SAP SE (Germany)


• Mambu GmbH (Germany)


• Temenos AG (Switzerland)


• Fidelity National Information Services, Inc. (U.S.)


• Fiserv, Inc. (U.S.)


• Tata Consultancy Services Limited (India)


• Tuum (Estonia)

KEY INDUSTRY DEVELOPMENTS: 

• January 2022 – Allica Bank engaged in partnership with the U.K.-based core banking software start-up SaaScada to support its new product range for SMEs.


• February 2021 – U.K. fintech provider SumUp acquired Lithuanian based core banking system provider Paysolut to expand its team and offer new products.

REPORT COVERAGE

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This market research report provides a detailed analysis of the market. It focuses on key aspects such as an overview of the technological advancements, the popularity of core banking software in the U.K., and pricing analysis. Additionally, it includes an overview of the banking functionality across retail, corporate, treasury, wealth management, the increasing investments by key players in fintech technologies in the U.K., new product launches, key industry developments such as mergers, partnerships, & acquisitions and the impact of COVID-19 on the market. Besides this, the report offers insights into the market trends and highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation