BFSI Security Market - Forecasts from 2024 to 2029

BFSI Security Market - Forecasts from 2024 to 2029

The global BFSI security market is expected to grow at a compound annual growth rate of 7.84% over the forecast period to reach a market size of US$72.512 billion in 2029 from US$42.746 billion in 2022.

Security is crucial in the Banking, Financial Services, and Insurance (BFSI) sector since sensitive data and transactions are involved. Because cyber threats are becoming more frequent and sophisticated, BFSI firms must continually deal with the challenge of safeguarding customer data, financial assets, and essential infrastructure against fraud, data breaches, and cyberattacks. Because of this, there is a growing demand for comprehensive security solutions that are appropriate for the unique needs and regulatory requirements of the BFSI industry. These solutions span a wide range of technologies, including multi-factor authentication, encryption, intrusion detection and prevention systems, and security analytics, with the objectives of lowering risks, ensuring compliance, and maintaining customer confidence.

The BFSI security environment is also being further shaped by the use of cutting-edge technologies like blockchain and artificial intelligence, which provide creative ways to strengthen security and resilience against changing cyber threats. Investing in strong security measures continues to be a primary priority as BFSI institutions navigate the digital transition and deal with cybersecurity issues to preserve assets, prevent financial losses, and maintain the integrity of the financial system.

MARKET TRENDS:

BFSI security refers to the adoption of several security solutions and services by banking and insurance companies to protect them or mitigate the risk of breaches. The market is projected to witness a growing trend in the coming five years since the advent of digitization and the penetration of the internet to smoothen up the operations across the sector has further opened up the gates of cybersecurity threats and frauds, thereby acting as a catalyst for the market growth during the next five years.

Moreover, the market has been witnessing a substantial increase with the fact that these institutions have inclined their focus towards the up-gradation of physical security solutions in regards to the stringent regulations by the governments across the various countries in the world regulating the need for efficient security protocols and compliance will boost the demand for these solutions over the forecast period.

Furthermore, the booming penetration of cloud services coupled with a substantial increase in the number of online transactions has further been propelling the business growth opportunities for the market players over the forecast period. Thus, the movement of these solutions to cloud-based services is also one of the major factors supplementing the market growth as well.

MARKET DRIVERS:

The growing trend of online banking is expected to influence global BFSI security market growth.

The market has been given a significant push by the burgeoning trend of online banking globally, particularly in developing economies such as India and China among others. This can also be backed up by the fact that India has been witnessing strong growth in the penetration of digital technologies across the BFSI sector. This is evident from a continuous increase in the number of digital payments across the country which is further represented in the chart below.

Considering the total population of the country, which is the second-largest in the world, and the proportion of the population still not making payments online, the digital payment segment in this country holds immense growth potential. This, in turn, is also playing a significant role in shaping the market growth in India. Furthermore, the popularity of digital banks in the country has been showing significant growth which is evident from the fact that Kotak 811 and Digisavings by DBS in the country have been intensifying the competition and attracting a lot of customers lately.
Increasing cyber security threats are predicted to positively impact global BFSI security market growth.

Strong cybersecurity solutions are in more demand as a result of the banking, financial services, and insurance (BFSI) industry's severe issues caused by the increasing frequency and complexity of cyberattacks. The banking and financial services sector (BFSI) must strengthen its security architecture since cyberattacks seeking to steal confidential information, interfere with business operations, and perpetrate financial fraud are increasingly targeting financial institutions. It is expected that the increase in cyberattacks will spur significant investments in cutting-edge security technology, such as identity and access management (IAM) tools, encryption platforms, threat detection and prevention systems, and security analytics platforms.

Furthermore, the necessity for BFSI organizations to strengthen their defenses against emerging cyber threats is further highlighted by regulatory mandates requiring strict cybersecurity procedures. Due to industry participants prioritizing cybersecurity expenditures to reduce risks, protect sensitive data, and maintain stakeholder and consumer trust in an increasingly digital financial world, the global BFSI security market is expected to develop significantly.

The North American region is anticipated to hold a significant share of the market.

Geographically, the North American region is anticipated to hold a significant share of the global market which is primarily attributed to the fact that the region is often known as one of the most prominent regions in the early adoption of technology with the presence of highly developed economies such as the United States and Canada among others. The presence of a world-class infrastructure across the BFSI sector also plays a major role in supporting the market share of the North American region over the forecast period.

Furthermore, the presence of key market players in the region along with the high adoption of digital technologies is also bolstering the demand for numerous security solutions across the BFSI sector in these economies. On the other hand, the Asia Pacific region is anticipated to witness substantial growth during the next five years which is attributed to the growth in the number of security breaches across the region and the rapid penetration of digital technologies across the BFSI industry in countries like India, China, and South Korea among others.

Key Developments:

In November 2023, to assist clients in improving their cyber security and compliance, Tata Consultancy Services introduced a new Cyber Insights Platform that makes use of AI and Amazon Security Lake.
In October 2023, with the release of its next-generation, modular, real-time, completely cloud-native core banking platform, Sopra Banking Software (SBS) took a big step forward in the development of business-critical banking systems. For SBS's broad clientele, the completely redesigned cloud-native platform represents a major turning point, enabling the full potential of cloud computing and artificial intelligence (AI).

Segmentation:

By Type
Physical Security
Information Security
By Offering
Hardware
Software
Services
By End-User
Banking and Financial Institutions
Insurance
By Geography
North America
USA
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
United Kingdom
Germany
France
Spain
Others
Middle East and Africa
Saudi Arabia
UAE
Israel
Others
Asia Pacific
China
Japan
India
South Korea
Taiwan
Thailand
Indonesia
Others