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Analysis of Core Banking Market in Australia and New Zealand

The core banking software market in Australia is sizable and expanding at a healthy clip. In 2024, Australia’s core banking software market was about US$480 million, and it is projected to reach roughly US$960 million by 2030, growing at a ~12.7% CAGR (2025–2030) (Australia Core Banking Software Market Size & Outlook, 2030) (Australia Core Banking Software Market Size & Outlook, 2030). New Zealand’s market is smaller (reflecting its population and banking sector size) but follows a similar trajectory of steady growth. Both countries have high banking penetration and mature financial systems, so growth is driven largely by technology upgrades and replacements of legacy systems rather than new bank formation.

Several key trends shape the ANZ core banking market:

  • Core Modernization & Cloud Migration: Banks are modernising decades-old core systems to enable real-time processing, agility, and product innovation (Australia’s Judo Bank Goes Live with Thought Machine’s Vault Core | The Fintech Times). Many core banking transformations involve shifting from on-premise mainframes to cloud-based cores or SaaS platforms for better scalability and resilience. For example, ANZ Bank New Zealand selected a cloud-native core (FIS’s Modern Banking Platform on Azure) to upgrade its legacy core (ANZ New Zealand selects FIS for core banking upgrade), a first outside the US. Similarly, Commonwealth Bank of Australia undertook a A$1+ billion core overhaul with SAP to achieve real-time, channel-agnostic banking (CBA unfazed by non-exclusive core banking deal - iTnews).

  • Digital Banking & Neobanks: The rise of digital-only banks and fintechs has spurred incumbents to accelerate core upgrades. Australia saw a wave of neobanks (e.g. 86 400, Volt Bank, Judo Bank, etc.) around 2018–2020 that built modern cores from scratch. For instance, neobank 86 400 adopted a cloud-native core from local provider Data Action, prioritizing open APIs and cost efficiency (How 86 400 built a cloud-native bank – Computerworld). Although some challengers were acquired or closed, they left a legacy of innovation that big banks are following (e.g. Bendigo Bank launching a digital bank “Up”). In New Zealand, traditional banks like Westpac NZ began modernizing via new core platforms (Infosys Finacle in Westpac’s case (Westpac NZ selects Infosys Finacle for Core Banking)) to keep pace with digital challengers.

  • Open Banking and API Integration: Australia’s Consumer Data Right (open banking) regime (launched mid-2020) has increased interconnection between banks and fintechs, pressuring banks to have core systems that can expose services via APIs (Australian banking market ready for core systems change - Pismo). Banks need flexible cores to share data securely and support fintech partnerships. This trend, along with real-time payments (e.g. Australia’s NPP), demands core systems with 24/7 availability and modular, API-driven architectures.

  • Regulatory Compliance & Security: Regulatory factors also drive core upgrades. Banks must comply with ever-evolving rules on data, resilience, and risk (APRA in Australia, RBNZ in NZ). Modern cores can help meet stringent security and uptime requirements. For example, Kiwibank (NZ) attempted a core replacement to improve compliance and innovation but faced delays and cost overruns with an SAP core project (Kiwibank’s SAP core banking system overhaul faces delays and budget increase), underscoring the challenge but also the regulatory expectation for robust systems.

Competitive Landscape

The competitive landscape for core banking technology in Australia and New Zealand is bifurcated. The market is served by a mix of long-established global vendors and newer cloud-native entrants, all vying for a limited number of bank clients. Most of the big four Australian banks historically built or bought proprietary or big-vendor cores (e.g. CBA with SAP, NAB with Oracle, Westpac and ANZ on older Hogan/COBOL systems). This means large deals are rare and hotly contested. Meanwhile, dozens of smaller institutions (regional banks, mutual banks, credit unions) provide a broad base of opportunities for vendors, albeit each deal is smaller.

  • Global Vendors Dominate: Traditional core banking providers like Temenos, Oracle FSS, Finastra, FIS, Fiserv, TCS, and Infosys Finacle have a strong presence. Many incumbent banks run one of these systems or a heavily customized variant. For example, Temenos is a popular choice in APAC and has implementations in the region (Temenos is a Leader in the IDC 2024 APAC Core Banking MarketScape) ([PDF] Asia/Pacific Digital Core Banking Platforms 2024 Vendor Assessment) (10x named as leader in IDC MarketScape for Asia/Pacific Digital ...). Oracle’s Flexcube was selected by NAB for its “NextGen” program and by others in the region (End is nigh for NAB core banking revamp). These established vendors compete on track record and breadth of functionality, but some struggle to shake a “legacy” image unless they offer new cloud versions.

  • Neo/Core Challenger Entrants: In recent years, cloud-native core providers (“neo cores”) have entered ANZ, promising faster implementation and flexibility. Examples include 10x Banking, Thought Machine, Mambu, and Vault/Core solutions. They are gaining traction especially with challenger banks and mid-tier institutions. Australia’s Judo Bank (an SME-focused challenger) migrated its lending operations to Thought Machine’s Vault core in 2024, citing the need to be free from “constraints of legacy systems” (Australia’s Judo Bank Goes Live with Thought Machine’s Vault Core | The Fintech Times). 10x Banking (a UK-based SaaS core) formed an alliance with Deloitte Australia to modernize mutual banks’ cores (10x and Deloitte deliver digital transformation to mutuals in Australia). These new players increase competition for the incumbent vendors, often competing on cloud technology, product flexibility, and speed to market rather than decades of references.

Overall, ANZ banks have a rich vendor choice, making the landscape competitive. However, switching core providers is a massive undertaking – so vendor “wins” usually come when a bank finally decides to replace a legacy system (a decision sometimes delayed for years). Notably, ANZ Bank’s group CIO has even said their old Hogan core isn’t yet a “hindrance,” with no immediate replacement plans (indicating the inertia and lengthy timelines in this market) (ANZ CIO says old core banking system “not a hindrance”). This suggests that while many vendors compete, the sales cycle is long and relationships/trust matter greatly.

Major Core Banking System Providers in ANZ

Both traditional core system providers and neo core banking platforms operate in Australia and New Zealand. Below is an overview of the major players in each category and their footprint:

Traditional Core Platform Vendors

Overall, traditional vendors in ANZ compete on reliability and comprehensive features. Many banks stick with incumbents or their in-house legacy due to the risk of change. This is why, for example, ANZ and Westpac still run decades-old Hogan mainframes with no immediate plans to swap (ANZ CIO says old core banking system “not a hindrance”). But as those systems age, the above vendors position themselves to capture the next replacement cycle.

Neo Core Banking Providers (Cloud-Native)

In the last few years, neo core providers – cloud-native platforms often provided by fintech start-ups – have gained attention in ANZ. These systems are typically offered as SaaS, built on modern microservices architecture, and promise faster time-to-market for new products.

  • 10x Banking (UK) – A cloud-native core founded by ex-Barclays CEO Antony Jenkins. 10x entered Australia via a partnership with Westpac in 2019 to build a Banking-as-a-Service platform (Westpac partners with 10x Future Technologies to build new platform). Westpac also invested in 10x, indicating strong interest in its technology. More recently (2024), 10x and Deloitte formed an alliance to target Australia’s mutual banks with a SaaS core solution (10x and Deloitte deliver digital transformation to mutuals in Australia). While 10x hasn’t yet announced a major Australian bank as a full core client, it’s viewed as a serious contender for banks looking to modernize incrementally or launch digital subsidiaries.

  • Thought Machine (UK) – Creator of the Vault core banking platform. Thought Machine has established a Sydney office and is actively serving the ANZ market (Australia’s Judo Bank Goes Live with Thought Machine’s Vault Core | The Fintech Times). A high-profile client is Judo Bank, which selected Vault for its lending business and went live in 2024 (Australia’s Judo Bank Goes Live with Thought Machine’s Vault Core | The Fintech Times). Thought Machine’s Vault is also behind Singapore’s Trust Bank, a new digital bank launched in 2022 (Singapore’s Trust Bank taps Thought Machine for core banking tech) (Singapore’s Trust Bank taps Thought Machine for core banking tech). Its technology, emphasizing flexibility and real-time capabilities, appeals to institutions that want to build products rapidly. In NZ or Australia, other banks rumored to be evaluating Vault include Tier-2 banks and digital bank startups. Thought Machine’s success with Standard Chartered’s digital banks in Asia (e.g. Mox in Hong Kong) adds credibility in the region (Singapore’s Trust Bank taps Thought Machine for core banking tech).

  • Mambu (Germany) – A SaaS banking engine that’s API-driven and widely used by fintech lenders and neobanks worldwide. Mambu has been active in Australia’s fintech scene: for instance, it was reportedly used by Volt Bank for deposit accounts and by other non-bank lenders. In 2021, Mambu won core banking deals in Vietnam and Colombia (2021: Top five core banking deals - FinTech Futures), showing its global reach. Its sweet spot is fast deployment for digital lending, deposit and payment products, making it a popular choice for greenfield digital banks or finance companies in SE Asia. Australian financial institutions that don’t require the full feature-set of a Temenos might opt for Mambu to launch specific products quickly.

  • Banking-as-a-Service Platforms: In addition to pure core vendors, some technology players offer “banking platform” services that include core functionality. For example, SAP (though not new, SAP’s cloud banking offering can be considered a modern approach used at CBA), and regional fintechs like Vault Payment Solutions (not to be confused with Thought Machine’s product). Microsoft and AWS also partner with core providers (ANZ NZ’s FIS core is on Azure (ANZ New Zealand selects FIS for core banking upgrade), and many new cores run on AWS by default).

  • Other Notables: Finxact (US, now Fiserv) and Vault Core (different from Vault Payments) are in early discussions in APAC. Starling Bank’s Engine (from UK) had one Australian taker via a fintech called Salt Money (Outdated systems holding you back? Back in… | Mambu), showing even challenger bank tech can enter the fray. These players are still emerging.

The presence of neo-core providers is significant because they introduce new competition and innovation. They often emphasize componentized cores, open APIs, microservice design, and faster upgrade cycles compared to the traditional core systems. Australian and NZ banks are evaluating these for either replacing specific modules or launching sidecars alongside the main core (as Westpac did with 10x BaaS). Going forward, the core banking market in ANZ is expected to be a blend – large banks might stick with proven vendors (possibly their new cloud versions), whereas smaller banks and new entrants could leapfrog to the neo solutions for agility.

System Integrators for Core Banking in ANZ

Implementing or replacing a core banking system is a complex, multi-year project, and system integrators (SIs) play a crucial role in this space. In Australia and New Zealand, banks typically enlist experienced consulting and IT services firms to help select, customize, and integrate core banking platforms. Below we identify key SIs specializing in core banking integration, along with the opportunities they are pursuing and competitive dynamics:

  • Accenture: A leading integrator in core banking globally and in ANZ. Accenture has been involved in landmark projects like CBA’s core modernization (as prime integrator alongside SAP) – CBA contracted Accenture for its A$580M core overhaul in 2008 (CBA unfazed by non-exclusive core banking deal - iTnews). Accenture’s Financial Services practice also has experience with Temenos, Finacle, and Oracle implementations. The firm often leads large-scale transformations, offering end-to-end services (from consulting to coding to change management). In ANZ, Accenture’s opportunity lies in the big banks’ eventual core replacements and major upgrades, as well as smaller banks that want a top-tier firm to de-risk their projects. Competitors to Accenture include other “Big 4” consultancies and global IT firms (and occasionally the bank’s own internal IT if they choose to self-manage).

  • Deloitte: Deloitte has a strong banking tech consulting arm in Australia/NZ and has recently made core banking modernization a focus, as seen by its alliance with 10x Banking (10x and Deloitte deliver digital transformation to mutuals in Australia). Deloitte often provides strategy, selection advice, and project assurance for core projects. They have led core system integration for some regional banks and were advisors on projects like TISA’s Flexcube deployment in PNG (June 2024: Top five core banking stories of the month). Deloitte’s opportunity is to leverage its global fintech partnerships (like with 10x and AWS) to capture mid-tier bank core transformations and the new wave of mutual bank upgrades. Competitively, Deloitte goes up against Accenture for big projects and against EY/PwC on advisory-led deals.

  • Capgemini: Capgemini and its acquired entity (IGATE) have implemented core banking systems (especially Finacle and Temenos) in Asia. In Australia, Capgemini helped some smaller institutions and was involved in parts of NAB’s Oracle-based program in the 2010s. Capgemini also has a delivery center in APAC that can support lower-cost development. They aim for opportunities in mid-size banks or as a vendor’s implementation partner. Capgemini competes with TCS and Infosys when those firms implement their own products, and with other multinational SIs.

  • IBM Consulting (IBM iX): IBM has historically been integrator for many bank IT systems. While not as frequently leading new core package implementations now, IBM was integral in maintaining older cores (like IBM’s mainframe systems) and has provided custom core solutions for some smaller banks. They also bring cloud infrastructure expertise for banks moving core to cloud. IBM’s opportunity is in hybrid projects – e.g. helping a bank modernize around a legacy core (APIs, middleware) or migrate to IBM Cloud. Competitors are the cloud-native specialists and other global SIs.

  • TCS, Infosys & Wipro: These India-headquartered IT services firms often implement their own core products (TCS BaNCS, Infosys Finacle) – for example, Infosys likely supported Westpac NZ’s Finacle rollout. They also serve as system integrators for third-party cores in some cases. TCS’s local Australian arm has a long history in banking (including an insurance and stock exchange systems). Wipro and Tech Mahindra have delivered Temenos and Finastra projects in APAC as well. These firms provide strong technical teams and cost advantages, which is an opportunity for cost-conscious banks. However, they often compete with the bank’s preference for a more local presence or with the product vendor’s own professional services.

  • DXC Technology (formerly CSC): DXC actually owns some legacy core systems (the Hogan system still used by ANZ Bank was originally from CSC). DXC provides core banking outsourcing for some smaller banks and continues to maintain legacy cores in the region. While not a frontrunner for new modern core projects, DXC’s role as custodian of old cores means it competes to keep banks on those systems vs. them moving to a new vendor. It also offers integration services around its own cores.

  • Specialist Fintech Integrators: A number of niche Australian firms focus on banking tech integration. For instance, Rubik Financial was an Australian company that provided core banking and channel solutions – Temenos acquired Rubik in 2017 to strengthen its local delivery (Temenos to acquire Australian partner Rubik for $50m). XPT/Xpert Digital implements digital banking front-ends and has Temenos expertise (Xpert Digital (XD) partners with Police Bank and Border Bank to ...). Such specialists often partner with core software vendors to implement mid-size projects. They compete on deep product knowledge and agility, but may be limited in scale for the largest transformations.

Opportunities: The core banking integration market in ANZ is poised for significant activity, as many banks are reaching the limits of their legacy platforms. Each major core replacement (e.g. if ANZ or Westpac decide to replace their core, or when mid-tier banks like BOQ, Kiwibank, etc. undertake projects) represents a huge opportunity for SIs – typically multi-year contracts worth tens or hundreds of millions. Additionally, the rise of digital banking (both new entrants and digital offshoots of incumbents) creates demand for smaller-scale core deployments, which SIs can support in a more modular, agile fashion. Even upgrades of existing core installations (e.g. moving an on-prem core to cloud, or adding new modules) require integration expertise.

Competitive Dynamics: Competition among SIs is intense. Global firms (Accenture, Deloitte, etc.) often leverage their strategic relationships and end-to-end capability to win prime contractor roles. Meanwhile, vendor-aligned integrators (TCS, Infosys, etc.) leverage their product know-how for faster delivery. We also see collaborations – for example, a big 4 consultancy might do project management while a tech firm handles configuration. Banks tend to invite multiple SIs to bid; selection factors include cost, experience with the chosen software, and ability to commit resources onshore. Notably, sometimes core vendors themselves have services teams that act as integrators (e.g. Temenos and SAP both provided engineers for CBA’s project, alongside Accenture (CBA unfazed by non-exclusive core banking deal - iTnews)). Thus, SIs also compete with the software vendors’ professional services and support units.

In summary, system integrators are key enablers of core banking change in ANZ. With many core projects expected in the coming 5–10 years, there is a substantial pipeline of opportunities for those firms – but winning and successfully delivering these projects requires strong credentials and partnership across the banking ecosystem.

Future Outlook: Technology, Regulation, and Market Dynamics

Looking ahead, the core banking market in Australia and New Zealand is set to evolve under the influence of new technologies, regulatory changes, and shifting market dynamics. Below are insights into the future outlook:

  • Cloud-Native and Modular Architectures: Future core banking systems will almost universally be cloud-enabled, whether as SaaS or private cloud deployments. Both incumbent vendors and new players are re-engineering their solutions to be modular (composed of microservices) and easily integrable. For banks, this means the possibility of a gradual core renewal – for example, implementing a new core for a subset of products or customers first (a “progressive renovation” strategy) rather than big-bang replacements. We can expect more ANZ banks to adopt hybrid core environments, where parts of the business run on a new cloud core (for agility) while legacy parts are phased out. The end-state target is often a composable banking architecture, where the core is one component plugged into an ecosystem of best-of-breed services (payments, fraud, analytics etc.). Technologies like containerization and Kubernetes will underpin many core deployments to ensure scalability. As an indicator, Vietnam’s regulator recently green-lit running core banking in the public cloud (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium) – a trend we anticipate in ANZ as APRA becomes more comfortable with cloud for critical systems.

  • Advanced Analytics and AI Integration: While core systems themselves handle transactions, the next-gen cores are being built with real-time data and analytics capabilities in mind. This includes feeding data to AI engines for personalized offers, and using machine learning for credit decisions or fraud detection at the core level. Australian banks are investing in data warehouses and AI; a modern core can provide richer, real-time data streams. We might see cores that have built-in AI ops for self-healing or that integrate with AI-based code tools (for instance, Accenture’s use of AI to interpret legacy code for core modernization (Core banking modernization: Unlocking legacy code with generative ...)). Over the next 5 years, AI could also assist in migration (automating data mapping from old to new systems) and in testing core systems.

  • Regulatory Factors: Regulators in both countries will heavily influence core banking trends. Australia’s APRA is focused on operational resilience – it has guidelines (CPS 230 etc.) that effectively require banks to ensure their core systems are robust and recoverable. This pushes banks toward active-active core setups, cloud DR, and updated software. Additionally, Open Banking compliance means banks must have systems that can expose data in standard formats on demand; older cores often struggle here, so banks may either wrap them with API layers or upgrade to more open cores. New Zealand’s RBNZ has been encouraging tech modernization as well, albeit through moral suasion more than formal mandates. Both countries also emphasize competition in banking: Australia’s licensing of new digital banks (and NZ’s consideration of fintech charters) creates an environment where incumbents know they must innovate or lose ground. Upcoming regulations on data privacy and security could also drive core upgrades (for better encryption, audit trails, etc.).

  • Market Dynamics and Competition: We anticipate a continued blurring of lines between incumbents and challengers. Incumbent banks are launching digital subsidiaries or brands (e.g. NAB’s UBank and the acquired 86 400 platform, Westpac’s planned digital bank via 10x) to defend market share. These initiatives often involve new core platforms, meaning more business for core vendors and integrators. The failure of some early neobanks (like Xinja, Vault in Australia) has tempered the market, but their technology approach (cloud-first core) has been validated by others like Judo and 86 400 (now UBank) being successful. Going forward, competitive dynamics will likely force all banks – large and small – to modernize their core to enable faster product rollout and seamless digital experiences. The competitive landscape of vendors will also shift: big vendors are acquiring smaller ones (e.g. Temenos buying Australian firm Rubik, Fiserv buying Finxact) to bolster their cloud offerings, while Big Tech companies (like AWS, Microsoft) deepen partnerships in core banking solutions, potentially even offering their own frameworks in the future.

  • Innovation: New Products & Services: With modern core systems, banks can more easily launch innovative products (such as buy-now-pay-later style loans, digital wallets, cryptocurrency custody, etc.). Australian and NZ banks are exploring these, and a flexible core is essential to support such innovation. For example, some banks are looking at blockchain for certain ledger functions or at least ensuring the core can integrate with distributed ledgers if needed (for trade finance or asset tokenization). While blockchain is not mainstream in core banking yet, future-ready cores are being designed to accommodate digital assets. Also, Banking-as-a-Service (BaaS) is emerging: big banks might use their core to offer services to fintechs (Westpac’s 10x platform is one case). This means cores must handle multi-tenant environments and open APIs, a trend that core vendors are embracing.

In summary, the future of core banking in Australia and New Zealand will likely see accelerated modernization as banks respond to digital consumer expectations and competitive pressures. Cloud-native cores, implemented in phases to mitigate risk, will become the norm. Banks that successfully upgrade will gain agility in launching services, whereas those that delay could find themselves hampered by legacy constraints (e.g., slow time to market, high IT costs, and even customer attrition). The regulatory environment – promoting competition and operational excellence – acts as both carrot and stick to encourage this evolution.

Australia/New Zealand vs. Southeast Asia: Market Growth Comparison

When comparing the core banking market outlook in Australia/New Zealand with that of Southeast Asia (focusing on Singapore, Thailand, and Vietnam), several contrasts emerge in terms of growth potential and drivers. Both regions are experiencing core banking transformations, but Southeast Asia’s market is generally in a higher-growth phase relative to the mature ANZ market. Below is a comparative analysis:

Market Maturity: Australia and New Zealand are highly mature banking markets – almost every adult has a bank account and the banking sector is dominated by a few large incumbents. Core banking activity is largely replacement and enhancement of existing systems. By contrast, Southeast Asia is more diverse: Singapore is mature (like ANZ, dominated by big banks), whereas Thailand and Vietnam are emerging markets with expanding banking sectors. In Vietnam, for example, banking penetration has been rising and new players are emerging alongside state-owned banks (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium) (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium). This means SEA has an element of greenfield growth (new banks, new customers) in addition to modernization of incumbents.

Growth Rates: The ANZ core banking tech market is growing steadily but modestly. As noted, Australia’s core banking software market is forecast ~12.7% CAGR to 2030 (Australia Core Banking Software Market Size & Outlook, 2030) – a robust rate for a developed market, driven by major upgrade cycles. New Zealand’s growth is likely similar in percentage terms (if from a smaller base). In Southeast Asia, growth rates are generally higher. Many banks in SEA are on the cusp of core replacements or first-time core implementations (for digital banks), which suggests double-digit growth that could exceed ANZ’s. For instance, the global core banking market CAGR is estimated ~18% (Core Banking Market Size & Share Analysis - Mordor Intelligence), with emerging Asia-Pacific countries contributing strongly to that uptick. Specifically, Vietnam is witnessing aggressive modernization – an overwhelming 94% of Vietnamese bank execs in one survey said slow tech transformation cost them customers (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium), reflecting urgency to invest. We can infer Vietnam’s spending on core tech will grow rapidly in the coming years. Thailand is introducing new virtual banks by 2025–2026, which will spur fresh core banking projects. Singapore, while saturated with incumbent tech, is still seeing growth via its new digital banks and incumbents adopting cloud – albeit growth is more incremental there (as many Singapore banks already modernized to some degree).

Key Drivers: In ANZ, core banking investment is driven by the need to replace aging systems, improve efficiency, meet regulatory mandates, and support digital channels for an already digitally-active customer base. The driver is often internal (bank strategy and cost) and regulatory (compliance). In Southeast Asia, drivers include financial inclusion and competition: regulators are issuing new licenses to increase competition (e.g. Singapore granted digital bank licenses in 2020, Thailand approving virtual banks in 2025 (Thailand Greenlights Three Digital Banks in FinTech Shake-Up), Vietnam encouraging digital-only banks via new guidelines). These moves require banks (new and old) to deploy modern core systems to serve new customer segments (underserved populations, SMEs, etc.) (Thailand Greenlights Three Digital Banks in FinTech Shake-Up) (Thailand Greenlights Three Digital Banks in FinTech Shake-Up). Additionally, consumer demand for digital banking is soaring in SEA with its young, mobile-first population – Vietnam has over 70% of people under 35 and high smartphone adoption (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium), fueling demand for cutting-edge digital banking services underpinned by flexible cores. Another driver in SEA is that many banks historically had outdated or patchwork cores (some ASEAN banks run 20+ year-old systems, or multiple systems per product) and now see an opportunity to leapfrog straight to cloud-native cores, whereas Australian banks often have one core but need to modernize it for agility.

Technology Adoption: Both regions are embracing cloud tech, but Southeast Asia may actually move faster in some respects because many banks there can adopt latest-gen systems without as much legacy baggage. For example, Vietnam’s VIB bank became the first in that country to run a core banking system fully on AWS cloud in 2023 (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium) – something no major Australian bank has done yet for their core (due to stricter regulatory posture historically). Also, new digital banks in Singapore and Thailand are architecting everything on cloud from day one. Australia/NZ banks are also moving to cloud, but mainly in hybrid mode and still ensuring compliance with stricter data standards. The net effect is SEA could see faster innovation cycles in core banking (new features, rapid scaling) as banks there may be less tied down by older infrastructure.

Regulatory Environment: Interestingly, regulators in Southeast Asia are in some cases more explicitly pushing core banking innovation. As mentioned, the State Bank of Vietnam has shown openness to cloud and modern tech. The Bank of Thailand’s virtual bank framework even evaluates applicants on their technology plans for reaching the unbanked (Bank of Thailand sticks to 3 virtual bank licences - Bangkok Post) (Thailand Greenlights Three Digital Banks in FinTech Shake-Up). In Singapore, the Monetary Authority (MAS) fostered an environment for digital banks to emerge with modern tech (e.g., requiring strong technology risk management but supporting cloud adoption). In Australia, regulators encourage modernization indirectly via operational risk guidelines and the open banking mandate, but they did not explicitly force core system changes – it’s been more market-driven. Therefore, regulation in SEA often acts as a catalyst for new core systems (through new licenses or explicit innovation agendas), whereas in ANZ it’s more of a nudge (ensuring systems meet standards, but not dictating how banks achieve that).

Competitive Landscape & Market Potential: In ANZ, the number of potential core deals is limited by the number of banks (the big four plus a handful of regionals hold most of the market share). Once those are modernized, the market may plateau until next refresh cycle many years later. Southeast Asia, however, has a large number of banks across various sizes (from giant state banks to small rural banks), and consolidation is still happening. There’s significant market potential for vendors to sell cores to many institutions. For example, Vietnam has dozens of joint-stock banks all upgrading in stages – Temenos alone commands ~37% of that market and still sees room to grow (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium). Similarly, Thailand’s mid-tier banks and new entrants will be shopping for cores in coming years. Southeast Asia also has foreign banks expanding (e.g. Chinese and Japanese banks setting up operations, requiring new systems), adding to demand.

In summary, Australia/New Zealand’s core banking market is in a mature, replacement-driven growth phase (steady but not explosive), whereas Southeast Asia’s is more dynamic with higher growth potential, fueled by financial sector expansion and digital entrants. ANZ banks benefit from strong existing infrastructure and are focusing on modernization for efficiency and product agility. Southeast Asian banks, on the other hand, are often building new capabilities outright – catching up or even leapfrogging – which translates to potentially faster growth in core banking investments.

The table below encapsulates some of the comparative points between the two regions:

Factor Australia & New Zealand Southeast Asia (Singapore, Thailand, Vietnam)
Market Maturity Very high – nearly 100% banked population, few new banks forming. Core projects are mainly replacements or upgrades in established banks. Mixed – ranges from mature (Singapore) to developing (Vietnam). New banks are being licensed (e.g. virtual banks), adding greenfield core implementations.
Core Market Growth Moderate 12–13% CAGR in software spend (Australia) (Australia Core Banking Software Market Size & Outlook, 2030); growth driven by tech refresh cycles. Total market size relatively small (hundreds of $M annually). Generally higher growth trajectory. Emerging markets show strong double-digit growth as many banks invest for the first time. Vietnam and others aggressively modernizing (94% of banks cite urgency) ([Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape
Key Growth Drivers Legacy replacement (aging mainframes -> modern core), digital channel demands from customers, and regulatory compliance (open banking, resilience). Competition is primarily incumbent vs incumbent, so efficiency and CX are drivers. Financial inclusion & competition – regulators enabling new entrants (digital banks in SG (Singapore’s Trust Bank taps Thought Machine for core banking tech), TH (Thailand Greenlights Three Digital Banks in FinTech Shake-Up)) pushing incumbents to upgrade. Also high customer growth in emerging economies and desire to leapfrog to digital-first services.
Technology Adoption Moving steadily to cloud/hybrid cloud cores, but often incrementally. Emphasis on integrating new modules (e.g. real-time payments) with stable legacy cores in interim. Cautious approach due to system criticality. Some banks skipping legacy tech entirely, going straight to cloud-native cores. Regulators increasingly open to cloud deployments ([Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape
Regulatory Environment Strong oversight (APRA, RBNZ) focusing on stability. Open Banking mandated in AU (since 2020) drives API capabilities (Australian banking market ready for core systems change - Pismo). No direct mandate to replace cores, but implicit pressure via operational risk standards. Proactive stance to boost innovation: new licenses come with expectation of innovative tech. E.g. Thai virtual banks must use innovative tech to reach the underbanked (Bank of Thailand sticks to 3 virtual bank licences - Bangkok Post). Regulators encourage modernization to support digital economy goals.
Vendor/Integrator Opportunity Limited number of large banks – each big core deal is huge but infrequent. Vendors face long sales cycles; SIs compete for a few big projects (e.g. one Big4 bank core replacement could be a once-in-decades event). Smaller bank segment provides continuous but smaller opportunities. Many banks at various stages of core upgrade – a broad base of opportunities. Multiple mid-sized banks and new banks seeking solutions simultaneously. Vendors can win many smaller deals that add up. SIs can partner across countries; local tech talent gaps mean outside integrators are welcomed.

Both regions will continue to invest in core banking transformation, but Southeast Asia’s banking market is expected to grow faster in terms of new core system adoptions. Australia and New Zealand, while growing more slowly, will still see significant modernization given the critical importance of banking (and the need to keep up with global digital banking standards). In fact, ANZ banks often observe the SEA experiments – for instance, seeing Singapore’s successful digital bank launches on cloud cores provides a valuable case study that may eventually encourage more aggressive moves in Australia’s big banks. Conversely, the experience of Australia’s large banks in executing massive core projects (CBA’s success, NAB’s challenges) offers lessons to banks in developing markets.

In conclusion, Australia and New Zealand present a stable but innovation-focused core banking market, whereas Southeast Asia offers a rapidly expanding and evolving landscape. A vendor or integrator evaluating these markets would find higher immediate growth potential in Southeast Asia, but also must navigate diverse requirements country by country. Meanwhile, the ANZ market, though slower, cannot be ignored – the deals there are large and the banks are often regional trendsetters in banking technology. Both regions are ultimately converging toward the same vision: modern, flexible core banking systems enabling the digital banking era, but they are starting from different points on the curve and moving at different speeds.

Sources:

  1. Grand View Research – Australia Core Banking Software Market Outlook (Australia Core Banking Software Market Size & Outlook, 2030) (Australia Core Banking Software Market Size & Outlook, 2030)
  2. FinTech Futures – ANZ New Zealand selects FIS Modern Banking Platform (ANZ New Zealand selects FIS for core banking upgrade); ANZ CIO on legacy core (Hogan) (ANZ CIO says old core banking system “not a hindrance”)
  3. FinTech Futures – June 2024 Core Banking Tech stories (Flexcube replacing Ultracs at TISA) (June 2024: Top five core banking stories of the month) (June 2024: Top five core banking stories of the month)
  4. iTnews – CBA’s Core Modernisation (SAP+Accenture) (CBA unfazed by non-exclusive core banking deal - iTnews)
  5. Thought Machine – Trust Bank (Singapore) selects Vault core (Singapore’s Trust Bank taps Thought Machine for core banking tech) (Singapore’s Trust Bank taps Thought Machine for core banking tech)
  6. Thought Machine – Judo Bank goes live on Vault (The Fintech Times) (Australia’s Judo Bank Goes Live with Thought Machine’s Vault Core | The Fintech Times)
  7. 10x Banking – Alliance with Deloitte Australia for mutual banks (10x and Deloitte deliver digital transformation to mutuals in Australia)
  8. Apps Run The World – Westpac NZ selects Finacle (2020) (Westpac NZ selects Infosys Finacle for Core Banking)
  9. FinTech Futures – Reserve Bank of Australia selects TCS BaNCS (TCS Bancs wins AU$13.6m core banking system contract with Reserve Bank of Australia)
  10. FinTech Futures – Kiwibank SAP core project delays (Kiwibank’s SAP core banking system overhaul faces delays and budget increase)
  11. Medium (Victor Leung) – Vietnam Core Banking Market Overview (modernization urgency, market share of vendors) (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium) (Core Banking Market in Vietnam, Marketing Strategies and Competitive Landscape | by Victor Leung | Apr, 2025 | Medium)
  12. Nation Thailand – Thailand greenlights 3 virtual banks (2025) (Thailand Greenlights Three Digital Banks in FinTech Shake-Up) (Thailand Greenlights Three Digital Banks in FinTech Shake-Up)
  13. Basiq/Pismo – Open Banking Australia arrival in 2020 (Australian banking market ready for core systems change - Pismo)
  14. Computerworld – How 86 400 built a cloud-native bank (Data Action core) (How 86 400 built a cloud-native bank – Computerworld)