USD 15.08 Billion
Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Size, Share, Growth Analysis, By Component(Service, and Solution), By Application(Risk Management, and Customer Service) - Industry Forecast 2024-2031
Report ID:
SQMIG40A2015 |
Region:
Global |
Published Date: April, 2024
Pages:
197
|
Tables:
61 |
Figures:
71
Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Insights
Global Artificial Intelligence (AI) in Banking, Financial Services and Insurance (BFSI) Market size was valued at USD 15.08 Billion in 2022 and is poised to grow from USD 19.87 Billion in 2023 to USD 180.93 Billion by 2031, growing at a CAGR of 31.8% in the forecast period (2024-2031).
The global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market is experiencing a transformative wave, driven by a convergence of technological advancements, shifting consumer demands, and regulatory pressures. In recent years, Artificial Intelligence has emerged as a game-changer for the BFSI sector, offering unprecedented opportunities to streamline operations, enhance customer experiences, and mitigate risks. The market dynamics within this sector are characterized by several key factors. Firstly, there's a growing recognition among BFSI institutions of the immense potential of AI to drive efficiency gains and cost savings. As a result, there has been a significant increase in investment in AI technologies by banks, insurance companies, and other financial institutions globally. This investment is fueling innovation and driving the development of advanced AI solutions tailored to the specific needs of the BFSI sector. Secondly, the competitive landscape within the global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market is intensifying, with both established players and startups vying for market share.
Market snapshot - 2024-2031
Global Market Size
Largest Segment
Solution
Fastest Growth
Service
Growth Rate
31.8% CAGR
Global Artificial Intelligence (AI) in Banking, Financial Services and Insurance (BFSI) Market ($ Bn)
Country Share for North America Region (%)
Global Artificial Intelligence (AI) in Banking, Financial Services and Insurance (BFSI) Market By Component ($ Bn)
Global Artificial Intelligence (AI) in Banking, Financial Services and Insurance (BFSI) Market By Component (%)
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Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Segmental Analysis
Based on component the market is segmented as service, and solution. Based on application the market is segmented into risk management and customer service. By region, the market is segmented into North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.
Analysis by Application
Risk management is the dominating segment of the market. Risk management accounted for the largest market revenue share by 2023. The evolving nature of financial fraud and cybersecurity threats requires sophisticated AI-powered, early detection risk management tools and dealing with fraudulent activities. As banks diversify their products and engage in complex transactions in enhancing the khimas. AI-powered risk management tools provide comprehensive analysis and modeling capabilities, helping banks mitigate risk across a complex range of financial products and services This increase in risk assessment and mitigation strategies the bottom line provided by AI-driven solutions further enhances the risk management segment.
The customer service segment is estimated to record the largest CAGR during the forecast period. The banking sector has placed great emphasis on delivering customer-centric and efficient experiences. AI-powered solutions deliver responsive yet highly personalized customer service through chatbots, virtual assistants, and voice recognition systems optimized to suit individual customer needs. As consumer expectations continue to evolve, the demand for round-the-clock support and increased speed of query resolution enables a four-way integration, whereby Ultimately ensuring a consistent and user-friendly customer service experience the segment develops within the market.
Analysis by Component
The solutions segment dominated the market with a 56.4% revenue share by 2023. In the global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market, the solutions segment of the banking industry is booming due to sophisticated AI-powered tools, such as fraud detection, due to increased customer demand. Additionally, advances in AI technology offer sophisticated, unique solutions that adapt to specific banking needs, improve efficiency and accuracy. Banks seek to modernize, deliver they invest in AI-based solutions to streamline processes, improve decision-making and deliver enhanced customer experience. This increasing adoption of AI solutions in banking operations is delivering expansion of the solutions segment in the global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market.
The service segment is expected to expand at the fastest CAGR during the forecast period. Banks are realizing the importance of providing expert guidance and support when implementing AI solutions and integrating them into their existing systems. As AI technology becomes more complex and specialized, the need for customized consulting, training and maintenance services has increased. Additionally, many financial institutions lack in-house expertise in AI technology, creating a requirement for external services to navigate challenges and tailor the AI system to specific bank needs This increasing reliance on external services for support deepening throughout the AI adoption lifecycle drives the expansion of the service segment in the global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market.
Global Artificial Intelligence (AI) in Banking, Financial Services and Insurance (BFSI) Market By Component (%), Banking (%)
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Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Regional Insights
North America is the dominating segment in the market. North America accounted for the largest share of global revenue by 2023. North America boasts a strong technology base and widespread digitization in its banking sector, which creates a favorable environment. Early adoption continues to be driven by the presence of leading AI technology providers, enabling AI integration and growth within the banking sector in North America.
Asia-Pacific is expected to grow at the largest CAGR during the forecast period. AI in the banking industry is booming in Asia Pacific due to the growth of the fintech industry, the rapid pace of digital transformation and the increasing number of people who have access to digital banking services. Growing economies within Asia Pacific, such as China and India, driven by institutions of new fintech startups and aggressive investments from the established economy. Additionally, banking is witnessing increasing adoption of AI, the rise of smartphones and the demand for convenient and efficient banking services among various regional customers is driving the adoption of AI technology in banking in markets.
Global Artificial Intelligence (AI) Hardware Market By Geography, 2024-2031
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Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Dynamics
Drivers
Enhanced Customer Experience
- One of the key drivers for the rapid adoption of global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market is the ability to enhance customer experience. AI-powered solutions such as chatbots, virtual assistants, personalized recommendation engines enable financial institutions to offer services an optimized seamlessly for their customers. Leveraging AI algorithms, BFSI companies can anticipate customer needs, provide proactive support, and deliver highly personalized offers Improve customer experience. That mindset installation not only improves customer satisfaction and loyalty but also improves retention and increases revenue opportunities for BFSI organizations.
Operational Efficiencies and Cost Reductions
- Another important driver of the use of AI in BFSI is the opportunity to achieve reduced operational efficiencies and costs. Financial institutions face constant pressure to streamline their operations, optimize distribution and reduce transaction costs. AI technologies offer a variety of solutions to address these challenges, including automation of routine tasks, optimization of business processes, risk management and fraud detection and predictive analytics. Through AI-driven solutions operationally, BFSIs can improve efficiency, reduce manual errors and allocate resources more efficiently, ultimately profitably by reducing operating costs.
Restraints
Data Privacy and Security Issues
- One of the major constraints that AI faces in the global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market is increased concerns about data privacy and security. Financial institutions handle a lot of sensitive customer data, and the use of AI poses additional challenges in protecting this data as complying with the fear rules and adopting AI in the BFSI industry is a significant challenge.
Ethical and Legal Challenges
- Another key imperative of AI in the global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market is the ethical and legal challenges associated with the use of AI. As AI systems become more sophisticated and self-questioning of algorithmic justice, the most obvious is accountability. Regulators in the financial department are responsible for establishing clear guidelines and standards for the responsible use of AI, with requirements for how interpretable and auditable. Meeting these ethical and legal expectations to enhance innovation and productivity creates a delicate balancing act for BFSIs.
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Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Competitive Landscape
A notable strategic partnership in global artificial intelligence (AI) in the Banking, Financial Services and Insurance (BFSI) market is IBM and Bank of America, a leading manufacturer of AI solutions between the former. They have jointly developed and implemented technologies. The partnership added IBM's advanced AI capabilities, including its Watson platform, to Bank of America's digital banking strategy. For example, Bank of America used AI-powered chatbots powered by IBM Watson to provide immediate support and assistance to customers through natural language.
Top Player’s Company Profiles
- Cape Analytics LLC
- Google LLC (Alphabet, Inc.)
- IBM Corporation
- Lexalytics, Inc.
- Intel Corporation
- Microsoft Corporation
- NVIDIA Corporation
- Palo Alto Networks, Inc.
- Tencent Holdings Limited
- Amazon Web Services Inc
- Avaamo Inc
- Baidu Inc
- Cape Analytics LLC
- Oracle Corporation
Recent Developments
- In May 2023, Temenos, a Swiss-based software company, acquired Amazon Web Services, Inc. This collaboration extends the global reach of the Temenos Banking Cloud, providing reliable and scalable banking services. Temenos' use of AWS ensures high availability across environments and addresses the need for data without costly on-premises infrastructure.
- In November 2023, Amazon Web Services, Inc. (NASDAQ:AMWS) is expected to have 100,000 shares. announced that Bank of Ayudhya Public Company Limited (Krungshree) in Thailand is using AWS to enhance customer experience and strengthen financial inclusion. Through AWS, Krungshree is creating a new culture, based on data analytics, devices learning (ML), and artificial intelligence (AI) to facilitate collaboration between three businesses—Bank of Ayodhya, Ayudhya Capital Services and Krungshree Auto.
- In September 2022, JPMorgan Chase & Co., a U.S.-based financial services company, announced that it will launch a $1.5 Billion investment in the United States. will acquire Renovite Technologies, Inc., a cloud payment technology company. The purchase was made by JPMorgan Chase & Co. part of the purchase. It enables it to develop an improved merchant acquisition process, strengthens its payment modernization process and facilitates the transition to cloud-based solutions.
Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Key Market Trends
- Rise of Expression AI: The key market trend shaping AI in BFSI landscape is the increasing attention on Expression AI. As AI systems become more complex and opaquer, there is a need for transparency and interpretability in AI decision-making processes, especially in highly regulated industries such as banking and finance grows interpretable AI Guide AI models and systems developers to provide human-understandable explanations for decisions and predictions Can be made. For a BFSI industry where decisions have a significant impact on the financial well-being of individuals, the ability to understand and rely on AI-driven recommendations is paramount. Consequently, the BFSI institute is investing in XAI technologically large. They enable compliance and risk management.
Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
The global artificial intelligence (AI) in banking, financial services, and insurance (BFSI) market is experiencing significant growth driven by global advances in artificial intelligence (AI) technology, changing consumer expectations and regulatory pressures. AI solutions are increasingly being adopted by BFSI organizations to streamline operations, enhance customer experience and reduce risks. The key drivers for the market are addressing enhanced customer experiences through personalized services and driving operational efficiencies and cost reductions through automation and predictive analytics but it is a key trend in the market facing adoption legal challenges related to AI use, data privacy and security concerns. The rise of interpretable AI, driven by the need for transparency and interpretability in AI decision-making, especially in highly regulated industries such as BFSI. Overall, AI in the BFSI market presents tremendous opportunities for innovation and growth, but challenging challenges to succeed.
| Report Metric | Details |
|---|---|
| Market size value in Banking | USD 15.08 Billion |
| Market size value in 2031 | USD 180.93 Billion |
| Growth Rate | 31.8% |
| Base year | 2023 |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
|
| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Report Snapshots
- Global Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Companies
- Global Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Size
- Global Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market Analysis
- Global Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Geographic Analysis
- Global Artificial Intelligence (AI) in Banking, Financial Services, and Insurance (BFSI) Market News
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