The Global Artificial Intelligence in BFSI Market size is expected to reach $252 billion by 2031, rising at a market growth of 32.3% CAGR during the forecast period.
The BFSI sector is subject to stringent regulatory requirements and risk management standards, necessitating data analytics and predictive tools to assess and mitigate risks effectively. Therefore, data analytics and prediction segment would generate 11.07% revenue share in 2031. Predictive analytics models analyze credit, market, and operational risks by incorporating historical data, macroeconomic indicators, and external factors.
The major strategies followed by the market participants are Partnerships, Collaborations, and Agreements as the key developmental strategy to keep pace with the changing demands of end users. For instance, in 2023, November, Google LLC is collaborating with Symphony Limited, the market infrastructure and tech firm, to ramp up its voice analytics offering to banks and investment firms. This collaboration will enhance the portfolio of the company. Additionally, in 2023, November, IBM Corporation collaborated with NatWest, a major retail and commercial bank in the United Kingdom, to enhance the customer experience. Through this collaboration, the banks can deliver an empowering value proposition.
Robotic process automation (RPA) technology automates repetitive, rule-based tasks by mimicking human actions within digital systems. In BFSI, RPA bots can perform various tasks such as data entry, document processing, account reconciliation, and transaction processing. Cognitive automation technologies accelerate loan approvals, reduce manual errors, and improve operational efficiency by automating these decision-making processes. Thus, these factors will assist in the growth of the market.
The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies to cater demand coming from the different industries. The key developmental strategies in the market are Partnerships & Collaborations.
Competition in the Artificial Intelligence sector within Banking, Financial Services, and Insurance (BFSI) is fierce, with a mix of established technology giants, startups, and in-house initiatives from major financial institutions vying to offer innovative AI solutions. Key battlegrounds include specialized applications such as fraud detection, risk assessment, and personalized financial services, with a focus on ensuring regulatory compliance, data security, and forging strategic partnerships to access domain expertise and valuable datasets.
The BFSI sector is subject to stringent regulatory requirements and risk management standards, necessitating data analytics and predictive tools to assess and mitigate risks effectively. Therefore, data analytics and prediction segment would generate 11.07% revenue share in 2031. Predictive analytics models analyze credit, market, and operational risks by incorporating historical data, macroeconomic indicators, and external factors.
The major strategies followed by the market participants are Partnerships, Collaborations, and Agreements as the key developmental strategy to keep pace with the changing demands of end users. For instance, in 2023, November, Google LLC is collaborating with Symphony Limited, the market infrastructure and tech firm, to ramp up its voice analytics offering to banks and investment firms. This collaboration will enhance the portfolio of the company. Additionally, in 2023, November, IBM Corporation collaborated with NatWest, a major retail and commercial bank in the United Kingdom, to enhance the customer experience. Through this collaboration, the banks can deliver an empowering value proposition.
Cardinal Matrix - Market Competition Analysis
Based on the Analysis presented in the Cardinal Matrix; Microsoft Corporation and Google LLC are the forerunners in the Market. In April, 2024, Microsoft Corporation collaborated with Abu Dhabi Bank (FAB), offering personal and private banking services, to develop new AI-based banking capabilities. Through this collaboration the company will accelerate advances in generative AI, intelligent automation, and machine learning for financial services. Companies such as Amazon Web Services, Inc., Oracle Corporation, IBM Corporation are some of the key innovators in Market.
Market Growth Factors
AI-driven advanced analytics enable BFSI firms to harness vast amounts of structured and unstructured data to make informed, data-driven decisions. By identifying patterns, correlations, and anomalies in market data, AI-powered predictive models can generate forecasts and probabilistic predictions, enabling traders, portfolio managers, and investors to make informed decisions and optimize investment strategies. Therefore, these aspects will boost the demand.Robotic process automation (RPA) technology automates repetitive, rule-based tasks by mimicking human actions within digital systems. In BFSI, RPA bots can perform various tasks such as data entry, document processing, account reconciliation, and transaction processing. Cognitive automation technologies accelerate loan approvals, reduce manual errors, and improve operational efficiency by automating these decision-making processes. Thus, these factors will assist in the growth of the market.
Market Restraining Factors
The regulatory framework governing the BFSI sector is multifaceted and continuously evolving. Navigating through the intricate web of regulations, each with its requirements and compliance standards, requires comprehensive expertise and resources. Ensuring the interpretability of AI-driven decisions is essential for regulatory compliance and fostering stakeholder trust. Hence, these aspects will lead to a downturn in the demand in the upcoming years.
The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies to cater demand coming from the different industries. The key developmental strategies in the market are Partnerships & Collaborations.
Offering Outlook
Based on offering, the market is segmented into hardware, software, and services. In 2023, the hardware segment garnered 26.99% revenue share in the market. AI-specific hardware configurations, such as GPU-accelerated servers and AI inference appliances, accelerate model training and inference tasks, enabling real-time decision-making and responsiveness in BFSI operations. Thus, the segment will grow rapidly in the coming years.
Technology Outlook
Based on technology, the market is divided into machine learning, natural language processing, computer vision, and others. In 2023, the natural language processing segment witnessed 30.91% revenue share in the market. By leveraging NLP-powered anomaly detection and fraud detection models, BFSI institutions enhance fraud detection accuracy and reduce false positives, minimizing financial losses and reputational risks. Therefore, the segment will expand rapidly in the upcoming years.Solution Outlook
Based on solution, the market is divided into chatbots, fraud detection & prevention, anti-money laundering, customer relationship management, data analytics & prediction, and others. In 2023, the fraud detection and prevention segment witnessed 21.27% revenue share in the market. BFSI institutions are investing in AI-driven fraud prevention solutions to secure digital transactions, authenticate user identities, and detect suspicious activities across multiple channels. Therefore, owing to these factors, the segment will grow rapidly in the coming years.By Regional Analysis
By region, the market is segmented into North America, Europe, Asia Pacific, and LAMEA. The North America segment procured 36.51% revenue share in the market in 2023. North America, particularly the United States, is a global hub for technological innovation and AI development. The region boasts a rich ecosystem of AI startups, driving advancements in machine learning, natural language processing, and predictive analytics. Thus, these factors will lead to enhanced demand in the segment.Market Competition and Attributes
Competition in the Artificial Intelligence sector within Banking, Financial Services, and Insurance (BFSI) is fierce, with a mix of established technology giants, startups, and in-house initiatives from major financial institutions vying to offer innovative AI solutions. Key battlegrounds include specialized applications such as fraud detection, risk assessment, and personalized financial services, with a focus on ensuring regulatory compliance, data security, and forging strategic partnerships to access domain expertise and valuable datasets.
Recent Strategies Deployed in the Market
- Apr-2024: Oracle Corporation launched an artificial intelligence-powered cloud service that helps banks mitigate anti-money laundering (AML) risks. This launch will increase the effectiveness of anti-money laundering and other financial crime detection programs to deliver higher efficiencies in the transactional modelling process.
- Dec-2023: Palantir Technologies Inc. came into partnership with UniCredit S.p.A., an international banking group, to deploy the Palantir Foundry operating system to accelerate the bank’s digital transformation and help increase revenue and mitigate risks. Through this partnership, the company is looking forward to furthering the bank’s digital transformation.
- Jun-2023: Amazon Web Services, Inc. collaborated with Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), a global banking leader, to use AWS to deliver advanced analytics and data services in the cloud, taking a decisive step in its data and artificial intelligence (AI) transformation process. Through this collaboration, the company will improve its data management capabilities, making data available to everyone to boost the impact of our data projects.
- May-2023: SAP SE extended its partnership with Google Cloud Platform, offered by Google LLC to introduce a comprehensive open data offering designed to simplify data landscapes and unleash the power of business data. Through this experience, the companies will help break down barriers between data stored in disparate systems, databases, and environments.
- Apr-2022: IBM Corporation launched a chip, a new generation mainframe with artificial intelligence built in, to provide financial firms such as banks and credit card companies with the ability to conduct fraud analysis. This launch will boost digital banking and e-commerce.
List of Key Companies Profiled
- Microsoft Corporation
- IBM Corporation
- Palantir Technologies Inc.
- Salesforce, Inc.
- SAP SE
- Baidu, Inc.
- Google LLC (Alphabet Inc.)
- Amazon Web Services, Inc. (Amazon.com, Inc.)
- Oracle Corporation
- Intel Corporation
Market Report Segmentation
By Offering- Software
- Hardware
- Services
- Machine Learning
- Natural Language Processing
- Computer Vision
- Others
- Chatbots
- Fraud Detection & Prevention
- Customer Relationship Management
- Data Analytics & Prediction
- Anti-Money Laundering
- Others
- North America
- US
- Canada
- Mexico
- Rest of North America
- Europe
- Germany
- UK
- France
- Russia
- Spain
- Italy
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- South Korea
- Singapore
- Malaysia
- Rest of Asia Pacific
- LAMEA
- Brazil
- Argentina
- UAE
- Saudi Arabia
- South Africa
- Nigeria
- Rest of LAMEA
Table of Contents
Chapter 1. Market Scope & Methodology
Chapter 2. Market at a Glance
Chapter 3. Market Overview
Chapter 4. Competition Analysis - Global
Chapter 5. Global Artificial Intelligence in BFSI Market by Offering
Chapter 6. Global Artificial Intelligence in BFSI Market by Technology
Chapter 7. Global Artificial Intelligence in BFSI Market by Solution
Chapter 8. Global Artificial Intelligence in BFSI Market by Region
Chapter 9. Company Profiles
Companies Mentioned
- Microsoft Corporation
- IBM Corporation
- Palantir Technologies Inc.
- Salesforce, Inc.
- SAP SE
- Baidu, Inc.
- Google LLC (Alphabet Inc.)
- Amazon Web Services, Inc. (Amazon.com, Inc.)
- Oracle Corporation
- Intel Corporation
Methodology
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