In 2022, the global market for financial clouds was valued at US$36.9 billion. In 2023, there will be a 42 billion dollar demand for banking cloud services. Finance cloud is predicted to increase at an 11.8% CAGR between 2023 and 2033, reaching US$ 128 billion by that time.
A major factor driving the market expansion for finance clouds has been the growing emphasis on digital financial transactions worldwide. Over the course of the projected period, the increased use of digital banking and remote working is also anticipated to propel market expansion. Furthermore, the majority of financial institutions have had to quickly implement remote working in recent years, which has resulted in a sharp increase in cloud-based infrastructure for business purposes.
The increase in demand for operational efficiency and transparency in business processes and the need for cloud among financial companies act as a critical driving force of the global finance cloud market. In addition, the demand for cloud solutions among small and medium-sized businesses continues to grow as they present several practical benefits, such as eradicating routine upgrades, cost-cutting, and business flexibility. As a result, these factors notably contribute to the development of the global demand for financial cloud platforms. Nevertheless, situations related to data safety, protection, and more elevated investment and maintenance expenses are restraining the development of the finance cloud market.
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Conversely, developing economies present significant opportunities for finance cloud companies to expand and grow their offerings, particularly in developing economies such as India, Japan, China, and South Korea. These countries are on the development threshold and require more significant financial resources. Thus, the demand for cost-effective resolutions is anticipated to provide lucrative prospects for market development. In addition, banks, financial institutions, and other financing firms are rapidly transitioning to digitalized business operations. As a result, the adoption and implementation of cloud technology have improved considerably, which is predicted to create new prospects for the market in the forthcoming years.
Financial cloud computing allows financial institutions to reduce their capital expenses. It occurs by eliminating the requirement for extensive on-premises infrastructure. Instead, businesses can pay for their resources on a monthly basis, making it possible for them to scale their computing capacity cost-effectively. This approach significantly reduces upfront costs and is driving the growth of the financial cloud market.
“With cloud-based development and testing environments, banking, financial services, and insurance institutions can quickly prototype and test ideas, speeding up their time-to-market for new offerings. Cloud-based solutions provide on-demand scalability, enabling financial organizations to manage fluctuations in customer demand and transaction volumes effectively,” opines Sudip Saha, managing director at Future Market Insights (FMI) analyst.
Key Takeaways from the Finance Cloud Market
- The global finance cloud market is estimated to register a CAGR of 11.8% with a valuation of US$ 128 billion by 2033.
- The market grew at a CAGR of 14.7% in the historical period from 2018 to 2022.
- The United States is anticipated to dominate the global market by registering a share of 22.5% during the forecast period.
- With a share of 21%, China is significantly driving the global market by 2033.
- Japan is anticipated to secure a share of 14.5% in the global market during the forecast period.
Key Players and Strategies for Success in the Finance Cloud Market
The market for finance cloud is positively competitive with many global and regional players. The key players in the global finance cloud market are adopting strategies such as collaborations, partnerships, etc., to expand their businesses. Cloud providers are also heavily funding research and development to integrate new technologies into their offerings and design progressive derivatives.
Recent Developments in the Finance Cloud Market
- In August 2023, Google partnered with Brillio to integrate generative AI into its customer experience, engineering, and data services. Financial services organizations can enhance their loan application analysis, authorize contact executives, offer adequate investment advice, and deliver more practical portfolio summaries.
- In November 2021, Amazon Web Services, Inc. announced a multi-year partnership with NASDAQ. The partnership aims to build a next-generation cloud-based infrastructure for global capital markets. The goal is to create a market infrastructure that is more durable, scalable, and open to all needs. The collaboration with NASDAQ will result in a genuinely cloud-based market infrastructure.
Restraints
While the Finance Cloud Market boasts considerable potential, it is not without its challenges. Data security, compliance with regulatory requirements, and ensuring seamless integration of cloud-based financial systems into existing infrastructures are some of the hurdles that need to be overcome. Careful navigation of these challenges will be crucial to sustaining the market’s growth trajectory.
Key Segments
By Solution:
- Financial Forecasting
- Financial Reporting & Analysis
- Security
- Governance, Risk & Compliances
By Service:
- Professional Services
- Managed Services
By Development:
- Public Cloud
- Private Cloud
- Hybrid Cloud
By Enterprise:
- Large Enterprises
- Medium Enterprises
- Small Enterprises
By Application:
- Revenue Management
- Wealth Management
- Account Management
- Customer Relationship Management
- Asset Management
By End-Use:
- Banking
- Financial Services
- Insurance
About Future Market Insights (FMI)
Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 400 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries. Join us as we commemorate 10 years of delivering trusted market insights. Reflecting on a decade of achievements, we continue to lead with integrity, innovation, and expertise.
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