Financial analytics refers to obtaining in-depth knowledge about a company’s financial status by analysing its financial data. This, in turn, helps in improving business performance and profitability. It also helps in measuring and managing tangible assets like cash, machinery, and others, and in identifying the factors that influence cost and revenue.
Financial analytics gives deeper insights into the financial status of an organization or business and thereby, ensures better decision-making. The global financial analytics market is expected to grow at a high CAGR, mainly due to technological advancements, growing demand for analytic solutions from end-users, and a rising demand for cloud-based services.
Financial analytics empowers end-users to manage their financial resources in a more efficient manner, by providing predictive insights. The adoption of analytical tools and services is increasing among the end-user organizations, which can be attributed to persistent advancements in business intelligence and business analytics solutions.
Additionally, organizations have to monitor and analyse a huge volume of unstructured data, which necessitates the use of analytics. With financial analytics, organizations can extract crucial insights from such unstructured data and thereby, build effective business strategies to improve the decision-making process.
All these factors are fuelling the growth of the global financial analytics market. The financial analysis software displays the monetary data in a dashboard and then presents the data in a graphical form to make it easy to understand and interpret. This helps accelerate the process of reporting financial data. All these eventually help organizations to improve their financial performance.
The level of awareness about the benefits of financial analytics is growing among the end-user organizations, which will exert a positive impact on the financial analytics market in the coming years. However, factors like data security, and rising incidences of cyber-attacks and data breaches may act as roadblocks for the market.
The looming threat of data breaches can discourage end-users from deploying financial analytics solutions and this may inhibit the market growth. Finally, a shortage of skilled professionals, mainly data analysts and data scientists, can also slow down the growth of the global financial analytics market.
Nevertheless, the financial analytics market is projected to grow at a high CAGR of 11.9% during the period 2018 to 2023. The market is predicted to reach USD 11.57 billion by 2023, from USD 5.89 billion in 2017. Among regions, North America dominated the market in 2016 with approximately 41% share, which can be explained by the high penetration of mobile devices and mobile internet in the region.
However, the Asia-Pacific region is expected to witness impressive growth in the coming years, mainly due to the growth of end-user industries in the region, growing awareness about analytic solutions, and initiatives taken by governments in this direction.