The liquidity and asset liability management solutions market size is projected to grow from US$ 1,787.59 million in 2022 to US$ 3,009.24 million by 2028; it is estimated to grow at a CAGR of 9.1% from 2022 to 2028.
Liquidity management can be referred to as an institution's act of ensuring the availability of sufficient cash and liquid assets for paying the institution's expenses and satisfying any client's loan or savings withdrawal demand. Asset liability management is the process of planning, organizing, and controlling asset and liability volumes, maturities, rates, and yields to minimize interest rate risk and maintain an acceptable profitability level. Liquidity and asset liability management solutions and services aid enterprises manage liquidity and asset liability effectively.
Growing stringency of regulations and rising attention to interest rate risk have been forcing banking institutions to seek comprehensive liquidity and asset liability management solutions. Interest Rate Risk in Banking Book (IRRBB) and EBA stress test under funding planning are some factors that require banks to assess the possible after-effects of an increase in interest rate, the change in values of interest-sensitive assets, and the resultant decrease in regulatory capital. In addition, the BFSI sector has been witnessing increasing regulations related to risk management. Furthermore, persistent fluctuations in interest rates across the US, the UK, Switzerland, Japan, and other large banking nations have diminished the BFSI sector's margins. Such factors have promoted the global liquidity and asset liability management solutions market growth. These solutions and services can allow financial institutions to undertake decisions based on scenario analysis, provide a better perspective from both risk and finance-based views, and strongly aid enterprises in complying with regulatory requirements. Most modern-day liquidity and asset liability solutions have integrated funds transfer pricing (FTP), allowing users to distinguish between the profitability of one activity with another.
Based on the liquidity and asset liability management solutions market report, the liquidity and asset liability management solutions market is segmented into component and industry. Based on component, the liquidity and asset liability management solutions market is segmented into solutions and services. Based on industry, the liquidity and asset liability management solutions market is segmented into banks, brokers, specialty finance, wealth advisors, and others.
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Liquidity and Asset Liability Management Solutions Market: Strategic Insights
Market Size Value in US$ 1,787.59 Million in 2022 Market Size Value by US$ 3,009.24 Million by 2028 Growth rate CAGR of 9.1% from 2022 to 2028 Forecast Period 2022-2028 Base Year 2022
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Liquidity and Asset Liability Management Solutions Market: Strategic Insights
| Market Size Value in | US$ 1,787.59 Million in 2022 |
| Market Size Value by | US$ 3,009.24 Million by 2028 |
| Growth rate | CAGR of 9.1% from 2022 to 2028 |
| Forecast Period | 2022-2028 |
| Base Year | 2022 |
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Impact of COVID-19 Pandemic on Liquidity and Asset Liability Management Solutions Market Size
With the social restrictions imposed by various countries in response to the onset of the COVID-19 pandemic, major stakeholders in the BFSI sector—such as banks, brokers, and wealth advisors—turned to digital platforms to meet their everyday needs. Digital wallets, often known as eWallets, became more popular amid these conditions. As a result of this transition, the likelihood of credit loss and nonperforming assets (NPAs) increased, while banks experienced unexpected asset liability management (ALM) model results. The Financial Action Task Force (FATF) has cautioned banks about unlawful money transactions. As a result, demand for liquidity and asset liability management solutions has surged, significantly influencing the liquidity and asset liability management solutions market growth. Moreover, owing to the widespread use of digital platforms, the volume of data on networks is growing, putting much strain on banks and financial institutions to timely maintain their balance sheets. Most regional and international banks have experienced significantly lower loan yields and margins than anticipated due to higher loan refinancing. The COVID-19 pandemic has accelerated developments in digital technologies and digital liquidity. Hence, banks and financial institutions are now using data analytics techniques to improve their asset management processes.
Lucrative Regions for Liquidity and Asset Liability Management Solutions Market
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
Market Insights – Liquidity and Asset Liability Management Solutions Market Analysis
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Growth of BNPL Industry
The progressive buy-now-pay-later (BNPL) industry is also supporting the growth of the liquidity and asset liability management solutions market. Effective credit risk and liability management is the key to success for BNPL players. Based on a report by Apptopia, BNPL app downloads reached 6.8 million in November 2021, up by 54% from November 2020, and monthly active users (MAU) increased by 63% year-over-year. Although the US leads the race, the number of active users in Europe has also grown significantly. Based on a report by PayU, 7.4% of total e-commerce transactions in Europe happened using BNPL services in 2020, and the transaction count is expected to grow by 45% over the next five years. Hence, with the globally proliferating BNPL industry, coupled with the growing focus on liability risk by industry players, the liquidity and asset liability management solutions market growth is anticipated at a good pace during the forecast period.
Component-Based Liquidity and Asset Liability Management Solutions Market Insights
Based on component, the liquidity and asset liability management solutions market is segmented into solutions and services. The solutions segment is expected to be the fastest-growing segment, primarily promoted by the advent of AI-enabled solutions. The services segment is expected to grow at a moderate pace during the forecast period.
End User-Based Liquidity and Asset Liability Management Solutions Market Insights
In terms of industry, the global liquidity and asset liability solutions market is segmented into banks, brokers, specialty finance, wealth advisors, and others. The banks segment is anticipated to be the largest segment during the forecast period, owing to the widespread adoption of liquidity and asset liability solutions across the globe.
Liquidity and asset liability management solutions market players are mainly focused on developing advanced and efficient products. A few examples are given below.
- In June 2022, Infosys Finacle, part of EdgeVerve Systems—a wholly-owned subsidiary of Infosys and Suryoday Small Finance Bank (SSFB) announced the successful implementation of the Finacle Core Banking Platform and Finacle Treasury Platform. Finacle will support SSFB's retail, corporate, and payment engines in an on-premise model supported by IBM's infrastructure stack.
- In February 2022, Data analytics and AI technology giant SAS acquired Honolulu-based Kamakura Corp., which will expand its reach within the financial services industry and broaden the SAS portfolio of financial risk management software. It is one of the leading companies in the data analytics and data management arena.
Company Profiles: Liquidity and Asset Liability Management Solutions Market
- Experian Information Software, Inc.
- Fidelity National Information Services, Inc.
- Finastra International Limited
- IBM Corporation
- Infosys, Ltd.
- Intellect Design Arena Limited
- Moody's Corporation
- Oracle Corporation
- SAP SE
- Wolters Kluwer N.V
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Component, and Industry
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, UAE, UK, US
Frequently Asked Questions
The global liquidity and asset liability management solutions market was estimated to be USD 1,661.64 million in 2021 and is expected to grow at a CAGR of 9.1%, during the forecast period 2022 - 2028.
Liquidity and asset liability management solutions market is being driven by the increasing credit risk across financial institutions. The banking and financial industry experienced severe disruptions in 2020 and 2021 after the onset of the COVID-19 pandemic. This provides growth opportunities for liquidity and asset liability management solution providers.
Growing integration of AI and analytics into liquidity and asset liability management solutions is expected to play a crucial role in the future of the liquidity and asset liability management solutions market. AI is being integrated extensively across numerous areas, from cloud computing applications to digital assistants, to automate the process.
The key players, holding majority shares, in liquidity and asset liability management solutions market includes Fidelity National Information Services, Inc., Moody's Corporation, Oracle Corporation, Wolters Kluwer N.V., and Finastra International Limited.
Asia Pacific is the fastest growing regional market, followed by North America.
China, India, Japan, and the US are expected to register high growth rates during the forecast period.
The US held the largest market share in 2021, followed by China.
The solutions led the liquidity and asset liability management solutions market with a significant share in 2021.
The liquidity and asset liability management solutions market is expected to reach US$ 3,009.24 million by 2028.
The incremental growth, expected to be recorded for the liquidity and asset liability management solutions market during the forecast period, is US$ 1,221.66 million.
The List of Companies - Liquidity and Asset Liability Management Solutions Market
- Experian Information Softwares, Inc.
- Fidelity National Information Services, Inc.
- Finastra International Limited
- IBM Corporation
- Infosys, Ltd.
- Intellect Design Arena Limited
- Moody's Corporation
- Oracle Corporation
- SAP SE
- Wolters Kluwer N.V.
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- Data Collection and Secondary Research:
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Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
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- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
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- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
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