C&I loan intelligence software TAM

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Commercial Loan Intelligence Software - TAM

While there were no precompiled industry reports available in the public domain pertaining to commercial loan intelligence software market size in the United States, we were able to come up with an estimated market value using top-down market sizing analysis and triangulation through various methods, i.e. analyzing the global trend and applying it to the United States market, utilizing the larger segment of the market and assumed to carry similar trend in the specific segment, and using interpolations to determine market share percentages within the banking, financial services and investment (BFSI) sector.

The estimated market size of commercial loan intelligence software in the United States in 2017 was $13.10 million and is expected to reach $19.65 million in 2020 at a CAGR of 14.45%. Below you will find detailed calculations, methodologies, and assumptions made of how these figures were derived.

GLOBAL FINANCIAL ANALYTICS/SOFTWARE AND THE BUSINESS INTELLIGENCE SOFTWARE MARKET

According to a report released by PR Newswire, financial analytics market was worth $5.244 billion in 2016 globally. It is projected to reach $10.383 billion in 2023 at a CAGR of 10.1% globally. In a separate report, North America was estimated to carry a 14.45% CAGR from 2017 until 2025.

From Marketsandmarkets' scope of this industry, financial analytics would consist of software "to derive real-time information from every transaction and its effect on the business performance." Financial analytics is a part of business intelligence and business analytics market that focuses on finance function across different organizations not just the banking and finance sector. Overall, the global business intelligence analytics market was worth $16.9B in 2016, according to Gartner estimate. The finance analytics market accounts for about 31% market share of the total [$5.244B/$16.9B].

BANKING, FINANCE SERVICES AND INVESTMENT (BFSI) SOFTWARE MARKET IN THE UNITED STATES

In the finance business intelligence analytics and software market, the BFSI segment dominated the market with 29% market share in 2016. Regionally, North America contributes about 43% share of the overall financial analytics market. Since there was no given breakdown for the United States, we assume that the North American share is equivalent to the United States market.

BFSI finance business intelligence analytics market size in 2016
= $1,520.76 million

United States' BFSI finance business intelligence analytics market size in 2016
=$1,520.76 million * 43%
= $653.93 million

COMMERCIAL LOAN INTELLIGENCE SOFTWARE ESTIMATED MARKET SIZE

In order to estimate the market size of loan intelligence software, we first define the following: 1) Banking and finance software market is the parent segment of banking and finances business intelligence software, and 2) Loan origination software is the parent segment of loan intelligence software.

According to Statista report, the banking and finance software market was worth $24.039 billion in 2017. Loan origination and processing solutions are one of the many segments identified in this industry. A separate report by Steemit Beta revealed that the loan origination software market is valued at $1,977.44 million [$1.977 billion] in 2017. From this given statistics, the market share of loan origination software from total banking and finance software market was 8.22%.

($1.977 billion/$24.039 billion)*100 = 8.22% (loan origination software market share from total)

Earlier, we have already identified that the total banking and finance services and investment (BFSI) intelligence software in the United States was worth $653.93 million in 2016. Assuming that the 8.22% loan origination software's share carries similar trend in its smaller segment, then the estimated market size for loan intelligence software market in the United States was $53.75 million.

$653.93 million*8.22% = $53.75 million

In order to determine market size specific for commercial loan applications, I used the percentage market share of commercial and industrial lending value in the United States. According to the Conference of State Bank Supervisors (CSBS) report, commercial and industrial lending accounted for 21.3% of the industry’s net loans and leases as of third quarter 2016.

Commercial loan intelligence software market size
= $53.75 million * 21.3%
= $11.45 million (estimated 2016 market size)

Using the 14.45% CAGR for Finance Analytics market in North America to calculate market size for 2017 until 2020:

2016 = $11.45 million
2017 = $11.45 million*1.1445 = $13.10 million
2018 = $13.10 million*1.1445 = $15.00 million
2019 = $15.00 million*1.1445 = $17.17 million
2020 = $17.17 million*1.1445 = $19.65 million

A survey conducted pertaining to commercial loan origination (CLO) applications in the United States reveals that "commercial lending is an increasingly important area of focus, however, there are a large number of banks that still rely on outdated, legacy technologies to support this key business line." As at 2016, 56% of banks plan to increase their expenditure budget for CLO systems while 36% of these banks plan to replace their system by 2018.

CONCLUSION

Finance analytics software in the banking and finance sector specific for commercial loan intelligence software in the United States was worth an estimated $13.10 million in 2017, about 2% share from the total loan origination business intelligence software [$13.10/$653.93]. This specific industry forecast to reach $19.65 million in 2020 at a CAGR of 14.45%.

Sources
Sources