Artificial Intelligence in BFSI Market Size, Share, Trend, Forecast, Competitive Analysis, and Growth Opportunity: 2023-2029
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Artificial Intelligence in BFSI Market Size, Share, Trend, Forecast, Competitive Analysis, and Growth Opportunity: 2023-2029
Global Artificial Intelligence in BFSI Market, by Component Type [Solution (Chatbots, Customer Behavior Analytics, Customer Relationship Management, Data Analytics and Prediction, Fraud Detection and Prevention, Anti-money Laundering), Service (Professional Service, Managed Service)], by Technology Type (Machine Learning and Deep Learning, Natural Language Processing, Querying Method, Computer Vision, Context Aware Processing), by Application Type (Back Office/Operations, Customer services, Financial Advisory, Risk Management & Compliance), and Region – Russia-Ukraine War Impact Analysis and Forecast to 2029.
Global Artificial Intelligence in BFSI Market, by Component Type [Solution (Chatbots, Customer Behavior Analytics, Customer Relationship Management, Data Analytics and Prediction, Fraud Detection and Prevention, Anti-money Laundering), Service (Professional Service, Managed Service)], by Technology Type...
The global artificial intelligence in BFSI market is expected to grow from USD 19.45 billion in 2022 to USD 56.03 billion by 2029 at a CAGR of 16.3% during the forecast period.
Want to know more about the market scope:
Artificial Intelligence (AI) in BFSI refers to the integration of Artificial Intelligence technologies in the Banking, Financial Services, and Insurance sector. This integration has resulted in several applications such as fraud detection and prevention, customer service and support, risk management, investment management, and compliance management.
AI algorithms can analyze large amounts of data and identify fraudulent activities, provide real-time risk assessments, optimize portfolio management strategies, and ensure compliance with regulations. The use of AI has enabled financial institutions to improve operational efficiency, reduce costs, and provide better customer service.
Additionally, AI-powered chatbots can provide instant responses to customer queries, thereby improving customer satisfaction and reducing churn. Overall, the use of AI in BFSI is transforming the industry and enabling financial institutions to make informed decisions and mitigate risks.
Key Players
The major players operating in the global artificial intelligence in BFSI market are:
IBM Corporation
Amazon Web Services (AWS)
Microsoft Corporation
Alibaba Group Holding Limited
ATOS SE
Cape Analytics LLC
Avaamo, Inc.
Baidu, Inc.
IPsoft Inc, (Amelia)
CognitiveScale, Inc.
ComplyAdvantage (IVXS UK Ltd.)
Digital Reasoning (Smarsh)
Google LLC (Alphabet Inc)
Inbenta Technologies, Inc.
Intel Corporation
Lexalytics, Inc.
Interactions, LLC
NICE Ltd.
SalesForce.com, Inc.
Oracle Corporation
Palo Alto Networks, Inc.
Nvidia Corporation
SAP SE
SAS Institute, Inc.
Tencent Holdings Limited
Market Dynamics
Investments in the fintech industry worldwide increased by more than 68% in 2021 as compared to 2020, with major digital companies like Google, Amazon, and Apple leading the way. A Bank of England survey suggests that entities will likely be inclined to invest in AI for both the medium and long term in 2022.
Consequently, the growing adoption of AI technologies, in conjunction with advanced financial analytics and machine learning (ML), has resulted in substantial investments towards developing AI technologies to improve financial operations and enhance user experience.
Data Security and Safety Concerns Hinder Market Growth:
Banking professionals have identified privacy and security issues as major obstacles to the adoption of AI technologies, with concerns about data security and safety being particularly prominent. Financial institutions are at increased risk of cyber threats due to their use of AI platforms and solutions to analyze customer data, which provide valuable insights for business decisions and process optimization.
The security of deep learning and machine learning algorithms presents a significant challenge to data protection. Nonetheless, governmental efforts to enact AI-specific legislation and establish dedicated AI regulators to monitor ethical and security threats are expected to address these limitations in the near future.
Digitalization of Financial Services to Bolster AI Solutions Uptake across the BFSI Sector:
The adoption of AI solutions in the BFSI sector is expected to increase due to the growing digitalization of financial services. The solution segment of the AI in BFSI market is projected to experience a CAGR of over 15% through 2032. Financial institutions are making ongoing efforts to incorporate AI solutions to digitize their operations, which results in smoother customer interactions, improved compliance with legal regulations, and reduced fraudulent activities.
The BFSI sector has also introduced AI solutions to enhance their offerings. For instance, Kiya.ai, a company that develops innovative digital solutions for financial institutions and governments, launched India's first-ever Banking Metaverse, named 'Kiyaverse', globally in June 2022.
Segment Analysis
Solution Insights
The data analytics & visualization segment is expected to experience significant growth in the AI in BFSI market under the solution category. This growth is due to the increasing usage of digital banking services that has led to a proliferation of digital data across financial institutes. Furthermore, the segment's growth is likely to be driven by intense competition and significant risks, which are prompting banks and other financial institutions to continually innovate and differentiate themselves by moving from a "customer-focused" to a "customer-centric" business model.
Technology Insights
In 2022, the machine learning segment of the AI in BFSI market held a 40% revenue share. This is attributed to the widespread use of machine learning technology for various purposes, including robo-advising, market impact analysis, financial monitoring, risk management, and process automation. The technology is beneficial for banks and financial institutions as it accelerates the underwriting process, improves portfolio composition & optimization, and facilitates model validation, which is expected to have a positive impact on the industry landscape.
Application Insights
The customer service segment of the AI in BFSI market is projected to reach USD 60 billion by 2032 in terms of application. This growth is due to the integration of AI technology into products and services, such as intelligent voice and chatbots, which facilitates streamlined communication with customers and provides hyper-personalized user experiences. For example, in July 2022, Glia, a digital customer service (DCS) provider, introduced Glia Virtual Assistants (GVAs) to assist businesses in providing seamless customer experiences that combine virtual and human support.
Geographic Analysis
The AI in BFSI market was analyzed across North America, Europe, Asia Pacific, Middle East and Africa, and South America regions. In 2022, North America and Europe dominated the market in terms of revenue and are expected to maintain their dominance throughout the forecast period. Commercial banks in these regions are prioritizing technological advancements, investing heavily in AI technologies to improve customer service and increase revenue, thereby driving the growth of AI in the BFSI industry in these regions.
However, Asia-Pacific is expected to exhibit the fastest growth rate in the near future due to the emergence of economies in the region. Developing countries are focusing on large-scale investments to increase productivity and consolidate technology in the market. Furthermore, recent advancements in AI and advanced analytics create new opportunities for businesses in the banking, financial services, and insurance industries, particularly in sales and service activities.
Research Methodology
This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.
More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data.
We conducted more than 15 detailed primary interviews with the market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.
Report Features
This report provides market intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into the market dynamics and will enable strategic decision making for the existing market players as well as those willing to enter the market. The following are the key features of the report:
Market structure: Overview, industry life cycle analysis, supply chain analysis.
Market Environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
Market trend and forecast analysis.
Market segment trend and forecast.
Competitive landscape and dynamics: Market share, Product Portfolio, New Product Launches, etc.
Attractive market segments and associated growth opportunities.
Emerging trends.
Strategic growth opportunities for the existing and new players.
Key success factors.
Customization Options
With this detailed report, Stratview Research offers one of the following free customization options to our respectable clients:
Company Profiling
Detailed profiling of additional market players (up to three players)
SWOT analysis of key players (up to three players)
Competitive Benchmarking
Benchmarking of key players on the following parameters: product portfolio, geographical reach, regional presence, and strategic alliances
Custom Research: Stratview research offers custom research services across the sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to sales@Stratviewresearch.com
Recent Developments
In January 2023, HDFC Bank partnered with Microsoft to develop in-house IPs. It is partnering with numerous companies, including FinTechs, to co-create technology IPs.
In December 2022, Tecnotree acquired CognitiveScale to accelerate AI-powered 5G monetization globally.
In October 2022, ComplyAdvantage, the financial industry's leading vendor of AI-driven financial crime risk data and detection technology, and Resistant AI, a specialist in AI and machine learning financial crime prevention, announced the general availability of their solution for fighting financial-related crimes across the US and Europe.
In October 2022, UBS and Microsoft extended their partnership to accelerate UBS’s public cloud footprint in next five years. UBS and Microsoft co-develop products and solutions to meet the emerging digital needs of the bank and financial services industry.
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The major players operating in the global Artificial Intelligence in BFSI market are IBM Corporation, Amazon Web Services (AWS), Microsoft Corporation, Alibaba Group Holding Limited, ATOS SE, Cape Analytics LLC, Avaamo, Inc., Baidu, Inc., IPsoft Inc, (Amelia), CognitiveScale, Inc., ComplyAdvantage (IVXS UK Ltd.), Digital Reasoning (Smarsh), Google LLC (Alphabet Inc), Inbenta Technologies, Inc., Intel Corporation, Lexalytics, Inc., Interactions, LLC, NICE Ltd., SalesForce.com, Inc., Oracle Corporation, Palo Alto Networks, Inc., Nvidia Corporation, SAP SE, SAS Institute, Inc., Tencent Holdings Limited.
In 2022, North America and Europe dominated the market in terms of revenue and are expected to maintain their dominance throughout the forecast period.
In 2022, the machine learning segment of the AI in BFSI market held a 40% revenue share. This is attributed to the widespread use of machine learning technology for various purposes, including robo-advising, market impact analysis, financial monitoring, risk management, and process automation.