The global AI in the BFSI market is estimated to grow significantly, at a CAGR of 34.3%, during the forecast period. Considered as the next big thing, AI is making way across the banking value chain. The applications of AI in banking involve developing proactive risk management systems and achieving productivity gains. The banking sector leads the way in the incorporation of new emerging technologies and innovations. The volume of data generated in the bank is quite large. In the last few years, the data generation has increased significantly to trillions of gigabytes. Numerous global financial institutions have incorporated AI to enhance product/service personalization and customer engagement. During the last decade, a large number of banks have spent strong on digitization drives, which have caused an upsurge in the adoption of AI.

Major BFSI applications for the adoption of AI include productivity gains, customer recommendation, personalization, and fraud detection and compliance. AI generates consumer insights that are useful in personalized communication, offers and services, and advice. With AI-powered automation, labor-intensive work such as documentation, compliance reporting, and new customer onboarding communications can become highly efficient and accurate. Implementing AI in the financial sector is still a treacherous terrain as it poses a lot many risks to the industry until rules and regulations are imposed on data breaching. In May 2016, the Monetary Authority of Singapore (MAS) ordered a shutdown to BSI Bank Singapore. This serious action is due to their compliance oversight in money laundering which resulted in a criminal case. Though AI technology might be revolutionary in every sector; however, without proper data to make them work is almost impossible. The user needs to feed a large set of data for the deployment of AI technology in the finance sector. 

Segmental Outlook  

The AI in the BFSI market is classified on the basis of component and application. Based on the component, the market is segmented into hardware and software & services. Based on the application, the market is segmented into chatbots, fraud detection & prevention, anti-money laundering, customer relationship management, and others (data analytics & prediction).  

Global AI in BFSI Market Share by End-user, 2018 (%)

Global AI in BFSI market to be driven by its rising application in fraud detection and prevention

The growth of AI in the BFSI sector is considerably backed by its rising adoption for fraud detection and prevention application. AI benefits in fraud detection by real-time sensing and providing enhanced abilities to spot glitches. AI allows banks to also offer customers with quality advice by removing human error. The personalized finance management tools powered by AI holds great potential. There are several startups that have started the development of AI for fraud detection solution. For instance, Shift Technology located in Paris had secured a funding of $60 million in March 2019. It works on an advanced AI algorithm to detect insurance frauds. Nethone, another startup based in Poland, provides software solutions for fraud prevention and business intelligence. The company’s algorithms identify and record devices that interact with a website and this data is integrated into the ‘know your customer’ process.

Regional Outlook 

The global AI in the BFSI market is classified on the basis of geography, including North America, Europe, Asia-Pacific, and the Rest of the World. North America is estimated to have considerable market share in the global AI in the BFSI market. The major countries which contribute to the North American market growth include the US. The early adoption of technologies and the high focus on innovation in the region are leading to the growth of the market in North America. North America is home to the largest companies in terms of revenue, which include Microsoft, IBM, and Google. The high internet penetration and high adoption of the digital economy are providing significant growth to the region in the AI in the BFSI market.

Global AI in BFSI Market Growth, by Region 2019-2025

Asia-Pacific is expected to propel with a considerable growth rate in the global market

Asia-Pacific is expected to project a considerable growth in the global AI in the BFSI market. China, India, and Japan hold a significant share in the market. Asia-Pacific is the fastest-growing region in the ICT sector due to its rapid transformation towards digital economies. Growing digitalization in these emerging economies is creating enormous opportunities for AI in the BFSI market in the region. Moreover, the region is advancing towards digital banking technology to encourage its competitiveness and to create a potential business market in order to attract a huge amount of investment. Additionally, fintech collaborations are becoming significant for economies of the region in order to develop robust and decentralized platforms for financial institutes. The major factor for the increasing number of fintech collaboration is growing cyber-attacks and the potential threat to banking platforms.

Market Players Outlook

The key players in the AI in the BFSI market are contributing significantly by providing advanced technology-based products and expanding their geographical presence across the globe. The key players operating in the global AI in the BFSI market include Kensho Technologies, LLC, Microsoft Corp., IBM Corp., Google LLC, and Intel Corp. These market players adopt various strategies such as product launch, partnerships, collaborations, mergers, and acquisitions to sustain a strong position in the market. 

The Report Covers

• Market value data analysis of 2018 and forecast to 2025.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global AI in the BFSI market. Based on the availability of data, information related to pipeline products, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.