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AI in BFSI Market Size
Artificial Intelligence in BFSI Market size valued at USD 20 billion in 2022 and is expected to exhibit a CAGR of 20% from 2023 to 2032, owing to increasing investments toward implementing AI solutions and services in the BFSI sector.
Global investments in the fintech sector grew by over 68% in 2021 compared to 2020. Digital enterprises and tech leaders such as Google, Amazon, and Apple are at the forefront of such technological investments. According to a Bank of England survey, in 2022, entities are likely to be interested in investing in AI for both medium and long term. Thus, the increasing acceptance of AI technologies, coupled with advanced financial analytics and ML, has led to massive investments in the development of AI technologies to improve financial operations and enhance user experience.
| Report Attributes | Details |
|---|---|
| Base Year: | 2022 |
| Market Size in 2022: | USD 20 billion |
| Forecast Period: | 2023 to 2032 |
| Forecast Period 2023 to 2032 CAGR: | 20% |
| 2032 Value Projection: | USD 100 billion |
| Historical Data for: | 2018 to 2022 |
| No. of Pages: | 300 |
| Tables, Charts & Figures: | 446 |
| Segments covered: | Component, Technology, Application, End-use, and Region |
| Growth Drivers: | |
| Pitfalls & Challenges: |
Data security and safety concerns to hinder product adoption
Banking professionals claim that privacy and security issues are the major barriers to the adoption of AI technologies. Financial institutions are more vulnerable to cyber threats since AI platforms and solutions analyze customer data to derive useful insights that help businesses make decisions and streamline their operations. Data security for deep learning and machine learning algorithms is a key challenge. However, mounting government efforts to implement AI-specific legislation and appoint dedicated AI regulators to oversee AI ethical and security threats are foreseen to counter these limitations in the upcoming period.
AI in BFSI Market Analysis
In terms of components, the artificial intelligence in BFSI market share from the solution segment is estimated to witness over 15% CAGR through 2032. Ongoing efforts by financial institutions to integrate AI solutions in order to digitalize their operations through smoother customer interactions, better legal compliance, and reduced fraud, along with the introduction of AI solutions in the BFSI sector. For instance, in June 2022, Kiya.ai, a developer of innovative digital solutions for financial institutions and governments, globally launched India's first-ever Banking Metaverse dubbed ‘Kiyaverse’.
Under solution, the artificial intelligence (AI) in BFSI market from data analytics & visualization segment is anticipated to record significant growth during the forecast timeline, attributed to the proliferation of digital data across financial institutes caused by the increasing usage of digital banking services. Furthermore, the segment growth is likely to be fueled by cutting-edge competition, and prominent risks that are urging banks and other financial institutions to constantly innovate and differentiate by shifting from "customer-focused" to "customer-centric" business models.
The artificial intelligence (AI) in BFSI market from the machine learning segment accounted for 40% revenue share in 2022. Widespread application of ML technology for various use cases, including robo-advising, market impact analysis, financial monitoring, risk management, and process automation. Additionally, this technology benefits banks and financial institutions by accelerating the underwriting process, portfolio composition & optimization, and model validation, which is speculated to positively influence the industry landscape.
As per application, the artificial intelligence in BFSI market share from the customer service segment is predicted to reach USD 60 billion by 2032. The hyper-personalization of user experiences through the integration of AI technology into products and services, including intelligent voice and chatbots, which streamlines communication with customers is anticipated to support the market expansion. For instance, in July 2022, Glia, a digital customer service (DCS) supplier, launched Glia Virtual Assistants (GVAs) to assist businesses by offering seamless customer experiences that combine virtual and human support.
By end-use, the artificial intelligence in BFSI market share from the bank segment will expand at a CAGR of 20% till 2032, as the mounting deployment of AI technology by banks for a variety of new applications owing to the soaring digital engagement led by evolving customer behaviors. Additionally, to generate new value propositions and enhance client experiences, incumbent banks are becoming AI-driven enterprises. For instance, in December 2022, Deutsche Bank and NVIDIA established a multi-year innovation partnership to advance AI and ML adoption in the financial services industry.
According to the report, the Europe artificial intelligence in BFSI market is estimated to hold more than 25% industry share by 2032, credited to favorable government policies that are encouraging AI adoption and promoting digitalization across several sectors. In April 2021, the EU announced the AI Act, which aims to introduce a common legal framework for AI for all sectors. Similarly, in March 2021, the European Investment Bank (EIB) granted €7.5 million (~USD 8 billion) to Cortical.io AG to support the development of AI technology based on NLU strategy that can comprehend and process text in human language.
AI in BFSI Market Share
Some of the leading companies involved in the AI in BFSI market include
- ATOS SE
- AWS Inc.
- Cape Analytics LLC
- Google LLC (Alphabet, Inc.)
- IBM Corporation
- Lexalytics, Inc.
- Intel Corporation
- Microsoft Corporation
- NVIDIA Corporation
- Palo Alto Networks, Inc.
- Tencent Holdings Limited
The market is foreseen to witness strategic collaborations and new product releases by companies. In February 2021, financial services company, BBVA, and Google Cloud, a cloud services suite, collaborated to revolutionize the bank's security strategy by optimizing and developing new AI & ML models for predicting and preventing cyberattacks.
Impact of COVID-19 pandemic
The COVID-19 outbreak facilitated huge investments in the implementation of AI and other digital technologies in the BFSI industry. The pandemic also expedited digitization in the banking sphere since consumers' bank visits were reduced and the use of online and mobile banking surged. This played a crucial role in increasing profitability and returns in the BFSI sector, which is expected to improve the post-pandemic market outlook.
This artificial intelligence in BFSI market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue in USD from 2018 to 2032, for the following segments:
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Market, By Component
- Solution
- Chatbots
- Customer Behaviour Analytics
- Customer Relationship Management
- Data Analytics & Visualization
- Fraud Detection
- Others
- Services
- Professional Services
- Managed Services
Market, By Technology
- Machine Learning
- Natural Language Processing (NLP)
- Computer Vision
- Others
Market, By Application
- Back Office/Operation
- Customer Service
- Financial Advisory
- Risk Management & Compliance
- Others
Market, By End-Use
- Bank
- Insurance Company
- Wealth Management Institute
The above information has been provided for the following regions and countries:
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Spain
- Sweden
- Switzerland
- Asia Pacific
- China
- India
- Japan
- South Korea
- Australia
- Singapore
- Latin America
- Brazil
- Mexico
- MEA
- UAE
- Israel
- South Africa
Frequently Asked Questions (FAQ) :