Banking Encryption Software Market Size

Global Banking Encryption Software Market size was valued at USD 2.22 Billion in 2023 and is poised to grow from USD 2.50 Billion in 2024 to USD 6.56 Billion by 2032, growing at a CAGR of 12.82% in the forecast period (2025-2032).

Banking encryption software provides a number of advantages, including seamless data transaction services and enhanced security. The increasing need for secure payment solutions in banks to offer more secure services to customers is driving the global banking encryption software market growth.

Additionally, the growth of digital payment systems and greater usage of digital payment instruments are also positive factors for the market to grow. The prevalence of online payment systems is combined with the threat of cyberattacks, which will generate more opportunities for the market. For instance, in 2024, the National Institute of Standards and Technology (NIST) released new quantum-resistant encryption standards to combat emerging cyber threats. This action shows the interest of the industry in enhancing security practices within the banking sector. However, ignorance and lack of awareness of the advantages of encryption on the part of consumers may hinder broader penetration, which will in turn rein in the growth of the market.

Conversely, increased adoption of data privacy legislation, that is, the Payment Card Industry Data Security Standards (PCI DSS) for the banking sector to protect sensitive data against fraud and theft, creates demand for banking encryption software. Even though the banking sector is regulated by authorities in a big way, it is still the most exploited sector by cybercriminals. The sector has a large quantity of information such as data on individuals, social security numbers, and payment card data. This creates a need for security measures within the banking sector to guard such information, leading to promising future growth opportunities.

Can AI-Driven Security Redefine Banking Encryption?

Application of artificial intelligence (AI) in banking encryption software is transforming the banking sector by boosting security and efficiency in operations. The innovation is crucial as the banking sector is faced with growing cyberattack threats and requires robust protective measures for sensitive data. AI enhances the effectiveness of encryption software through real-time adjustments of security measures against evolving threats. It employs machine learning algorithms for scanning big data, identifying patterns, and predicting potential vulnerabilities to dynamically modify encryption methods. Pre-emptive in nature, the strategy allows banks to stay ahead of cyber thieves, significantly increasing data security. For this reason, the substantial adoption rate of AI-powered encryption software among banks and financial institutions, because of its benefits, is expected to fuel market growth during the forecast period.

• For instance, Commonwealth Bank of Australia (CBA) in November 2024 invested heavily in artificial intelligence (AI) to improve its banking services. The bank's AI initiatives have witnessed a reduction of 40% in waiting times at the call center and 50% in losses from scams. These have improved customer service efficiency and the bank's cybersecurity resilience.