The Unified Communication-as-a-Service in Banking Market is anticipated to witness a CAGR of 18.7% over the forecast period 2021-2026. The banking industry relies heavily on customer engagement. Customers have become the driving force behind the banking industry and banks are looking forward to enhancing their customer experiences and service costs reduction at the same time.
- Unified Communications (UC), since its inception, emerged as a cost-effective solution for the banking sector. Banks are now investing in UCaaS to get a bird's-eye view of customer communications across all channels to attain scalability required for large-scale implementation.
- Though functionality may vary on the degree of implementation, it broadly incorporates Interactive Voice Response (IVR), video conferencing, live chat, e-mails, unified messaging, VoIP services, and other client management capabilities.
- This technology helps increase availability and scalability while enhancing collaboration. UCaaS solutions are designed to allow enterprises to focus on the growth of their business rather than the maintenance of it. Businesses need not pay for UC software with features that they will never use, thereby aids in saving money.
- A Boston-based research and advisory firm estimated that global tech spending had reached around USD 261.1 billion in 2018, climbing almost 4.2% from the previous year.
Key Market Trends
Proliferation of Cloud Based Ecosystem to Drive the Market Growth
- Enterprises are searching for ways that cut down on expenses and has the potential to generate internal revenues. Making essential files and data accessible through the cloud was found to be a feasible solution, which in turn has led to the proliferation of the BYOD trend. The banks are quickly following suit, and given the globalized nature of their business, remote access of data becomes an essential feature for this industry. A cloud report published by Rightscale in 2018, stated that more than 68% of running applications used for communication are built on Cloud services of Amazon (AWS).
- Encouraging employees to bring their own devices is an efficient way of adding capacity to IT infrastructure. This will enable employees to work away from the office while still being able to access the system over the internet by accessing data and files they need. For instance, Team Sites comes with Office 365 and allows employees to edit the documents simultaneously while being in different locations, and taking part in online conferences.
- A new report from iPass, a commercial Wi-Fi network service provider, indicates that 70% of mobile workers adapt their companies' bring your own device (BYOD) policies. For some, BYOD is a must. This trend will also get increasingly reflected in the banking industry, as the lines between office and private spaces get blurred.
North America to Remain the Largest Market for UCaaS in Banking Industry
- The region of North America is a major revenue contributor and will lead the global UCaaS market in the banking industry during the forecast period, owing to the emergence of huge tech-savvy employees, high focus on innovations obtained from research and development and technology, and improved infrastructure in the region. Growth in the investment by enterprises in the banking industry and growing trends of mobility and BYOD is expected to drive the demand for UCaaS market.
- The US is one of the fastest growing markets with many of the major banks of the world headquartered there. The banks in the country are cash rich and tech-savvy and are most likely to adopt any new technology in the unified communications segment.
- Celent estimates that the overall bank IT spending in 2018, is approximately USD 104 billion. Citigroup Inc. estimates that around 20% of the expense budget is dedicated to technology spending, in 2018. Based on the data gathered from a research study on more than 600 end-user organizations in North America, it is understood that around 29% of the organizations are utilizing UCaaS already, by using cloud-based platforms for all of their collaboration needs.
The unified communication as-a-service in banking market is a consolidated market with a few players dominating the market with their technological expertise in unified communications. While innovation remains the prime factor for market domination in this industry, the major players are focusing on expanding their customer base by leveraging on strategic collaborative initiatives and by acquiring smaller players to strengthen their hold in the market further. The major players include RingCentral, Inc., 8X8 Inc., West Unified Communications Services, Inc., Cisco Systems Inc., Fuze Inc., Avaya Inc., Voss Solutions, NetFortris, Inc., TetraVX, and Kurmi Software, among others.
- March 2019 - Avaya Holdings Corp. introduced a program that provides financial organizations access to high-level communications across a variety of client touchpoints, thereby delivering banking reliability & security.
- March 2019 - Optus Business announced the launch of Optus Cloud Calling, a cloud-based calling and collaboration solution, that includes mobility, audio and video conferencing, collaboration, and enterprise telephony. This solution is based on Cisco's BroadCloud and Webex portfolios.
- April 2019 - Momentum Telecom acquired Metro Optical Solutions, a leading provider of managed network, data, and internet solutions to enterprise and carrier customers globally. This acquisition is expected to further position Momentum Telecom as a leader in the UCaaS market.
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