With the surging use of digital payment technologies, there has been increased adoption of encryption software among banks. According to Inkwood Research, the global banking encryption software market is expected to record a CAGR of 13.39% during the forecast period, 2022-2030. Also, the growing demand for data security technologies among banks and financial institutions is set to offer growth opportunities.
Growth Trends influencing the Global bank encryption software market are:
COVID-19 Impact
The COVID-19 impact has had mixed impacts on several sectors. In the case of the banking encryption software industry, the steady growth and rising investments are attributed to the surging use of digital banking services, the growing ransomware attacks on banks, and the enhanced use of digital services and mobile payment services.
Also, the use of digital payment technologies like credit cards, mobile banking, and debit cards promote market growth. The banking encryption software offers several advantages like secure payment processing services, excellent security, and easy data transaction. In addition, the software helps encrypt and decrypt client secret information in terms of consumer demands. This has resulted in FinTech agencies and banks using the software to protect information like banker notes, customer emails, survey replies, and contact center transcripts.
Furthermore, the pandemic has resulted in important changes, accredited to the growing awareness about offering secured banking services. Besides, the pandemic-induced norms like work-from-home, and digital transformation of the payment industry have strengthened the demand for bank encryption software. As a result, many firms such as Thales Group, Broadcom INC, Microsoft Corporation, Dell Technologies INC, Trend Micro INC, IBM, etc., are focusing their investments on encryption software.
FinTech shows an Upward Scale
FinTech, short for financial technology, is a modern movement yet technological assistance for financial services is not a recent phenomenon. Financial services introduced credit cards in the 1950s, internet banking in the 1990s, and contactless payment technology in the early 21st century. Additionally, the BFSI segment growth has been steered by FinTech applications like digital payments, robotic process automation (RPA), RegTech and InsureTech, loan underwriting, portfolio management, and fraud detection and prevention.
Also, the technology boom in developed and developing countries is transitioning from internet banking and mobile banking to digital banking. Besides, the increased usage of telecom, mobile gadgets, and data services at affordable rates, emerging market players, rising consumer awareness, and regulated e-commerce platforms have stabilized the FinTech incorporation into the banking sector, thereby offering lucrative growth opportunities.
Popularity of Mobile Payments
Several significant advancements in payment services have facilitated the use of mobile payment (m-payment). It is a vital part of mobile commerce, which entails applications of wireless networks and mobile devices to enable commercial transactions over the web-based system. Also, the growing use of m-payment services in developing countries is attributed to low-cost mobile phones, unreliable fixed-line communication, and surging mobile use.
Further, m-payment services have enabled money transfer without bank accounts alongside minimizing personal risks and saving financial costs and time. Moreover, the fragile and vulnerable network of financial institutions and the lack of definitive money transfer infrastructure drive the implementation of m-payment services, enhancing socio-economic activities even in rural areas.
Market by Deployment: Share & Growth Analysis
The global bank encryption software market segmentation assessment includes function, deployment model, enterprise size, and component. Of these, the deployment model projects lucrative growth, with the cloud slated to be the fastest-growing deployment model. This is accredited to the growing visualization & cloud adoption and strict regulations.
The cloud deployment model is evaluated to project a 14.45% CAGR by 2030 in the global market. Cloud encryption is a service provided by cloud storage providers wherein data is transitioned through different encryption algorithms before being placed on a storage cloud. Also, encryption is incorporated into the cloud in several ways, from data encryption in file systems and databases to data transfer over internal and public networks.
Furthermore, several financial institutes and banks’ rising adoption of cloud-based encryption software offers growth opportunities. Also, this deployment model offers enterprises access to confidential information and has regulated control from far locations and enhanced security.
Future Outlook
The accelerated digitization, including APIs and automation, can help banks leverage software swifter, placing embedded finance within reach for market players. Also, banks are increasingly focusing on software engineering, acknowledging payments, deposits, or lending as another product capability to add to the user experience. However, compromised software integrity with regard to independent verification of transactions hinders the market’s growth.
At the same time, banks offer digital banking channels like digital banking, mobile banking, internet banking, and ATM kiosks to provide the best quality services to consumers for cost-effective operations and increased revenues. Such advantages are set to facilitate lucrative opportunities for the global bank encryption software market growth.
FAQs:
What kind of data needs encryption?
Apart from the conventional personally identifiable information like social security numbers, addresses, and names, non-public personal information, credit scores, collection history, and customer information and records require encryption.
What roles do encryption play in securing IT assets?
The importance of encryption in IT encompasses confidentiality for encoding the message content, integrity to prove the message was unchanged since it was sent, and authentication for verifying message origin.