Increasing Credit Risk Across Financial Institutions is anticipated to boost the Liquidity and Asset Liability Management Solutions Market Growth
According to our latest market study on “Liquidity and Asset Liability Management Solutions Market Forecast to 2028 – COVID-19 Impact and Global Analysis – by Component and Industry,” 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.
The banking & financial industry experienced severe disruptions in 2020 and 2021 after the onset of the COVID-19 pandemic. The pandemic adversely impacted banks’ credit portfolios, owing to the unprecedented increase in unemployment and collapse of economic activities, which led to the inability and reluctance among customers and businesses to pay the interest amounts. Based on a report by Genpact, in 2020, the global mortgage forbearance increased sharply by ~3,000%. Similarly, automotive loan modification requests increased ~10-times across the industry, while inquiries for credit cards, new mortgages, and automotive loans dropped by 30–50% in 2020 compared with 2019. In response to these changes in statistics, banks and financial institutions had to take certain measures to manage and mitigate credit risks, creating a demand for liquidity asset and liability management software. This software solution allows banks and financial institutions to optimize net interest margins, and develop contingency funding plans for ongoing events. Hence, the solution associated benefit is anticipated to boost the liquidity and asset liability management solutions market size over the forecast period
The buy-now-pay-later (BNPL) industry in Europe has witnessed significant growth post-COVID-19 outbreak, owing to the increased e-commerce penetration and economic slowdown. Moreover, the BNPL service is becoming increasingly popular among young consumers owing to the rise in preference for deferred payment for online purchases. Hence, the growing BNPL industry across the UK, Germany, and France, among others, is another factor favoring the liquidity and asset liability management solutions market growth in the region.
Similarly, Asia has been the world's largest regional banking market for a decade, generating more than US$ 700 billion in pre-tax profits in 2018, accounting for 37% of global banking profits. More than 40 of the world's 100 largest banks by assets are Asian, and they account for ~50% of the market capitalization of the world's 100 largest banks. The vast banking sector in the region is anticipated to create huge opportunities for the liquidity and asset liability management solutions market players. According to the DIGI Race Global Payments Map report, digital payments in China account for ~99% of the country's non-cash transaction volume and 45% of digital payments globally. Such a rise in digital adoption is likely to boost the liquidity and asset liability management solutions market size across the region during the forecast period.
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. Based on geography, the liquidity and asset liability management solutions market is segmented into North America (the US, Canada, and Mexico), Europe (Germany, France, Italy, the UK, Russia, and the Rest of Europe), Asia Pacific (Australia, China, Japan, South Korea, India, and the Rest of APAC), the Middle East & Africa (South Africa, Saudi Arabia, the UAE, and the Rest of MEA), and South & Central America (Brazil, Argentina, and the Rest of South & Central America).
Liquidity and Asset Liability Management Solutions Market – by Region, 2021 and 2028 (%)
Liquidity and Asset Liability Management Solutions Market Forecast to 2028 – COVID-19 Impact and Global Analysis – by Component (Solutions and Services) and Industry (Banks, Broker, Specialty Finance, Wealth Advisors, and Others)
Liquidity and Asset Liability Management Solutions Market Size Report 2028
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Impact of COVID-19 Pandemic on APAC Liquidity and Asset Liability Management Solutions Market
The COVID-19 pandemic resulted in a massive financial loss for APAC in 2020. Governments of countries in APAC imposed strict containment measures to slow down the disease spread, which hampered the financial performances of various sectors. The lowered financial outcomes caused a significant rise in nonperforming loans (NPLs) in a few Asian economies, which called for a close analysis of the determinants. Considering the growing credit losses, businesses in the region took the necessary steps to execute in-depth checks, investigate them thoroughly, and report them to the relevant authorities. Thus, the demand for ALM solutions surged in APAC countries, resulting in the liquidity and asset liability management solutions market growth.
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; and Wolters Kluwer N.V are among the leading players operating in the liquidity and asset liability management solutions market.