Banking Encryption Software Market
Report ID: SQMIG45E2346
Report ID: SQMIG45E2346
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Report ID:
SQMIG45E2346 |
Region:
Global |
Published Date: May, 2025
Pages:
183
|Tables:
112
|Figures:
71
Global Banking Encryption Software Market size was valued at USD 2.72 Billion in 2024 and is poised to grow from USD 3.08 Billion in 2025 to USD 8.29 Billion by 2033, growing at a CAGR of 13.2% during the forecast period (2026–2033).
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.
Market snapshot - 2026-2033
Global Market Size
USD 2.4 billion
Largest Segment
Software
Fastest Growth
Service
Growth Rate
13.2% CAGR
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Global Banking Encryption Software Market is segmented by Component, Deployment, Enterprise Size, Function and region. Based on Component, the market is segmented into Software and Service. Based on Deployment, the market is segmented into On-Premise and Cloud. Based on Enterprise Size, the market is segmented into Large Enterprises and Small & Medium Enterprises. Based on Function, the market is segmented into Disk Encryption, Communication Encryption, File/Folder Encryption and Cloud Encryption. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
Startups are bringing innovative security solutions to the banking encryption software market, which is transforming at a rapid pace. Startups are leveraging blockchain, artificial intelligence, and advanced cryptography methods to enhance the security of financial information. Startups are leading the way in the revolution of banking security due to heightened regulatory pressures and cyber threats. The future of digital banking security depends on their solutions, which allow secure transactions, fraud protection, and improved compliance.
As per the 2024 global banking encryption software market analysis, the software segment was the biggest, holding 64.64% of the market due largely to its role in developing, deploying, and managing financial products. It keeps sensitive customer details like names, addresses, and dates of birth safe from cyber-attacks. With an increasing number of banks relying on encryption software to safeguard transactions and enhance security for digital banking, the segment will predicted be on the path to rising growth. Conversely, the advent of mobile and online banking, coupled with stringent regulatory requirements, further accelerates the adoption of encryption software, and this is for secure transfer of customer funds.
The service segment is expected to experience robust growth during the forecast period. It includes professional services, managed services, and training and development, among others. Professional services help banks integrate encryption software smoothly with their existing systems. Managed services offer prolonged infrastructure support and maintenance to the banks.
Based on the 2024 global banking encryption software market forecast, due to the necessity of more control over their software and data safety on the part of financial organizations, the on-premise sector contributed 65% to the market share. As it helps them process sensitive data within their facilities and reduces their reliance on third-party cloud providers, banks and businesses prefer on-premises deployment. Moreover, with on-premise solutions even in the event of disruptions on the internet, access to data is not disrupted. In a bid to increase security and reduce cyber-attacks, JPMorgan Chase, for example, bolstered its on-premise encryption infrastructure in January 2024. Banks continue to value on-premises encryption solutions to protect their key assets as data breaches and regulatory requirements raise more concerns.
Cloud deployment will register the greatest CAGR over the projection period. Due to the fact that numerous security and management functions are provided with cloud deployment, it can be deployed by virtually any type of business. Banks and banking organizations can benefit from higher fault tolerance levels, disaster recovery, and data protection with cloud deployment where the technology is being taken care of by the service provider. Additionally, cloud deployment provides high redundancy and backup levels at a reduced cost.
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North America was the global leader in banking encryption software with 34% of revenue share in 2024. Established infrastructures in countries like the United States and Canada are major reasons for the leadership of the region. Legislation like the Gramm-Leach-Bliley Act (GLBA) and the California Consumer Privacy Act are to blame for an increased demand for such services in banks. The presence of all the technologies and other material aids the region to invest in cybersecurity as there has been a significant threat towards various cyber-crimes. The increased use of artificial intelligence and machine learning can aid the expansion of the market.
The increased use of online banking and rising cyber threats drove the 2024 value of the U.S. banking encryption software market, which was USD 640 million. Banks are compelled to invest in next-generation encryption products by tough money regulations like the Federal Financial Institutions Examination Council (FFIEC) guidelines and the Gramm-Leach-Bliley Act (GLBA). JPMorgan Chase bolstered their cybersecurity infrastructure in February 2024 by implementing encryption techniques that are artificial intelligence-based to safeguard transactions from the bank. Sturdy encryption software that can safeguard sensitive financial information is needed more than ever before, due to the recent increase in ransomware attacks.
Expansion in online banking and strengthened data protection legislation are driving a huge growth in Canada's financial encryption software market. Banks must implement encryption under the Personal Information Protection and Electronic Documents Act (PIPEDA). To protect digital transactions from potential cybersecurity threats, the Royal Bank of Canada (RBC) implemented a quantum-resistant encryption solution in March 2024. The use of encryption software has increased manifold following the popularity of contactless payment and mobile banking. In the battle against changing cyber threats and in ensuring compliance with regulations, financial institutions are spending more and more on AI-powered encryption solutions.
Asia-Pacific is anticipated to achieve the maximum growth with an exponential CAGR in the banking encryption software market during the forecast period 2025-2032. The increasing number of banks in South Korea, China, and India are driving the demand for encryption software in the region. The region has a high digitalization of online banking services, which increases the demand for advanced encryption technologies and drives the growth of the market. Asia Pacific has an enormous number of developing regions, which provide opportunities for new companies and investments within the region too. These developments can lead to the growth of the market.
The South Korean banking encryption software market is expanding significantly due to the nation's robust fintech sector and stringent cybersecurity rules under the Personal Information Protection Act (PIPA). The security of encryption is also supported by more uses of blockchain-based banking systems. KEB Hana Bank introduced an AI-driven encryption system in April 2024 for stronger data protection and fraud prevention. Strong encryption technology is more important than ever in South Korea due to the increasing use of digital wallets and mobile banking, ensuring safe transactions while meeting government regulations for financial security.
The China banking encryption software market is growing at a high rate driven by the country's emphasis on cybersecurity and widespread adoption of online banking. Tight encryption standards for money transactions are implemented under the Chinese Cryptography Law. To avoid data leaks in online banking, quantum encryption technology was embraced by the Industrial and Commercial Bank of China (ICBC) in May 2024. With mobile payments through Alipay and WeChat Pay platforms growing so fast, encryption software is becoming an indispensable tool to protect transactions from money laundering and cyber attacks.
Europe is also expected to account for a reasonable share of the banking encryption software market. Policies and regulations in Europe may shape the market over the next few years. The government and system in the region are conducive to the spread of encryption technology across the continent. Increasing usage of encryption services among financial institutions will fuel the banking encryption market growth.
Regulations like the General Data Protection Regulation (GDPR) and Financial Conduct Authority's (FCA) guidelines for cybersecurity are driving the UK banking encryption software market's steady growth. Barclays announced an AI-powered encryption system in February 2024 to increase secure transactions and safeguard client information. Demand for robust encryption solutions has increased in the UK due to a rise in fintech and open financial services' usage. Banks are investing financially in advanced encryption software to provide data security as well as comply with regulatory requirements in the wake of cyber attacks on banks and financial institutions.
Since banks give growing importance to information security due to the German Banking Act, and the GDPR terms of the EU, the Germany banking encryption software market is growing further. With the rise of contactless transactions and online banking, the demand for encryption software has also risen. Deutsche Bank introduced post-quantum cryptography in March 2024 to protect financial transactions from potential cyberattacks. AI-based encryption is being employed by German banks to safeguard against cyberattacks and enable safe money transfers. The nation's emphasis on innovation and economic security is fueling the rise in the use of encryption software.
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Some of the key players in the banking encryption software market include IBM Corporation, Microsoft Corporation, and Broadcom Inc. Organizations are focusing on integrating sophisticated technologies into their offerings to maintain competitive positions. Consistently, leaders are pursuing various strategic activities, such as new product launches, acquisitions, and partnerships. For instance, IBM Corporation provides IBM Guardium Data Encryption, which is data encryption and key management software. It features one suite of products on a shared infrastructure and offers capabilities such as data masking, tokenization, data encryption, and key management.
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, the global banking encryption software market outlook will change at a fast pace due to the increasing cyberattacks, extensive use of digital banking, and developments in artificial intelligence and quantum-resistant cryptography. Top vendors are innovating advanced encryption solutions as banks focus on secure transactions and protection of data. The future of secure banking is being shaped by post-quantum encryption and AI-powered threat detection. Robust encryption will remain at the center of the world's financial infrastructure, although the sector is still predicted to grow with the increasing adoption of fintech and changing security needs, despite the lingering limitations of regulatory overcomplication and high deployment costs.
| Report Metric | Details |
|---|---|
| Market size value in 2024 | USD 2.72 Billion |
| Market size value in 2033 | USD 8.29 Billion |
| Growth Rate | 13.2% |
| Base year | 2024 |
| Forecast period | 2026-2033 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
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| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
Methodology
For the Banking Encryption Software Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Banking Encryption Software Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
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