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According to statistics made by Insure Insight, the global artificial intelligence BFSI market was sized at a value of $17,765.2 million in 2020 and is projected to hit $247,366.7 million, registering a CAGR of 38.0 % during the forecast period (2022 – 2030).
GLOBAL ARTIFICIAL INTELLIGENCE BFSI MARKET – MARKET OVERVIEW
Artificial intelligence (AI) is a field of computer science that focuses on the development of intelligent machines that work and perform tasks in the same way that humans do. As a result, it has become a critical component of technology in the BFSI industry. AI has become a core adaption of every single business in financial institutions and other major finance industries, and it is expected to change the overall scenario of service offerings. Many traditional banking problems, such as increased capital demand, have been looped into an AI-based solution in the BFSI market. For example, insurance companies are using advanced AI technological platforms to improve risk models in order to maintain customer loyalty and client satisfaction.
GLOBAL ARTIFICIAL INTELLIGENCE BFSI MARKET – MARKET DYNAMICS
BFSI is one of the most rapidly adopting industry verticals for artificial intelligence. This is due to the increasing advancement of artificial intelligence and machine learning in various industries around the world. One of AI’s critical features in the BFSI industry is its ability to respond probabilistically to ambiguous real-world inputs. Analytics, bots, robotic process automation (RPA), and report generation are the most common applications of artificial intelligence in banking.
Top Driver: the increasing demand for customized financial services is spurring the market growth
In today’s BFSI market, customer preferences vary greatly. Artificial intelligence has enabled banks and financial institutions to tailor and personalize their services to meet the needs of their customers. AI has assisted financial institutions in lowering their long-term costs by deploying customer service bots.
Furthermore, Proactive customer experience through AI-assisted backend process automation to reduce human error is expected to drive AI growth in the BFSI market. Furthermore, chatbots and Robo-advisors for financial products, as well as smart wallets, are some of the factors driving the market growth. Furthermore, AI-enabled technologies such as chatbots, machine learning, and other such technologies improve fraud detection, risk mitigation, and back-end office work with thousands of people processing customer requests, which boosts the market growth.
Top Driver: high costs associated with AI technologies will hinder the market growth
However, higher implementation costs for AI technologies increased security concerns, and a lack of trust when issuing customer data are expected to limit the market growth.
COVID-19 IMPACTS ON THE GLOBAL ARTIFICIAL INTELLIGENCE BFSI MARKET
The semiconductor industry has faced a severe impact of COVID-19. According to key market players, the industry has faced a 12% decline since the onset of COVID-19. The pandemic has caused key semiconductor players to mobilize quickly and make both short-term and long-term strategies to maintain the growth of the sector. The semiconductor sector faced major lay off during the pandemic period, owing to a decrease in demand at the global level. Many end-use industries are facing a temporary halt to the manufacturing process. Besides, many governments are still imposing lockdowns which are expected to affect the overall electric sector for some time. Major semiconductor players are looking for a pre-pandemic condition to start normal operation and for that moment, they are planning and reshaping strategies for their business models.
The chatbot segment is projected to witness significant growth during the forecast period
The chatbots segment contributed the most revenue in 2018 and is expected to do so again during the forecast period. Because chatbots are powered by natural language processing, banks, and other financial institutions can quickly assist common customer service queries, improve on-boarding processes, and improve sales effectiveness. Furthermore, it increases cost savings by lowering customer acquisition costs on a large scale and collecting real-time feedback from market customers.
The North American region and Europe possess the highest revenue shares in the global artificial intelligence market
In terms of revenue, North America and Europe dominated the artificial intelligence in the BFSI market in 2018 and are expected to maintain their dominance throughout the forecast period. Commercial banks in these regions prioritize technological advancements, with higher investments in artificial intelligence technologies aimed at improving customer service and increasing revenue in their businesses, propelling the growth of artificial intelligence in the region’s BFSI industry.
The global artificial intelligence BFSI market is reasonably competitive with mergers, acquisitions, and product launches. See some of the major key players in the market;
Barclays announced a partnership with AI startup Simudyne in July 2019. Simudyne is an expert in agent-based modeling. The collaboration has allowed the client to gain a thorough understanding of the possibilities and risks associated with lending to a specific customer or making a specific investment.
Scope of the Report
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It builds a seven-year estimate based on how the market is predicted to grow and shows what will market shares of the national markets change by 2030 and which nation will lead the market in 2030.
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