Global trade has been increasing at an exponential rate. A vast network of global as well as local trades results in voluminous financial transactions and subsequent reporting. Manual bookkeeping simply cannot handle the volume of such transactions. Also, it would be impossible to audit the books and consolidate the reports for further analysis. A financial reporting software is capable of preparing financial statements that conform with regulatory requirements and reporting standards.
The financial reporting software has been growing steadily at a CAGR of over 10%, with the APAC region showing outstanding growth potential. Here are some of the growth drivers for the financial reporting software market:
Increasing Complexity and Velocity of Financial Data
The capital market has evolved from simple accounting to complex trading such as derivatives market, hedge funds, and options market. The sheer volume of data is also on the rise along with complex transactions. The procurement report on the global financial reporting software market states that New York Stock Exchange generates more than one terabytes of data daily. Therefore, companies are relying on quants to process accurate real-time data to conduct financial analysis.
Limited Capabilities of Existing Spreadsheet Solutions
A wide majority of the organizations use spreadsheet solutions for their financial reporting. While it’s cost effective and easy to operate, it fails to process voluminous data. Additionally, it’s also unable to provide consolidated reports, data security, and lack of privacy, which, in turn, favors the financial reporting software market. Even the best spreadsheet tool MS Excel cannot go beyond 1 million rows and 16,000 columns.
Rising Costs of Compliance
Top financial players across the globe have implemented stringent regulatory frameworks after the subprime debt crisis, which led to the depression. In a bid to increase investor confidence and transparency in the capital markets, the compliance costs for the financial institutions has risen significantly. Such regulations will require the company to hire more professionals, therefore, increasing administrative costs. However, a financial reporting software is capable of collating data from multiple sources and standardizing reports with greater accuracy.
Read more about growth drivers in the financial reporting software market along with supply market landscape, pricing, and procurement insights in SpendEdge’s upcoming procurement report on the financial reporting software market.