The Global Generative AI In Financial Services Market size is expected to reach USD21.1 billion by 2031, rising at a market growth of 38.8% CAGR during the forecast period.
Many countries in the Asia Pacific are experiencing significant digital transformation in their financial sectors, with increased investment in AI technologies. This trend is evident in countries like China, India, and Singapore, where financial institutions leverage Generative AI to enhance services and improve operational efficiencies. Thus, the Asia Pacific region would acquire 26% of the total market share by 2031.
The major strategies followed by the market participants are Partnerships as the key developmental strategy to keep pace with the changing demands of end users. For instance, In May, 2024, Oracle Corporation announced a partnership with Accenture, a global consultancy firm, to develop generative AI solutions. Leveraging Oracle Cloud Infrastructure, the two companies aimed to improve efficiency, resilience, and customer experiences, focusing initially on digital finance transformation and expanding to other industries. Moreover, In August, 2024, Accenture PLC signed a partnership with S&P Global, a capital market company. The partnership aimed to drive generative AI innovation in financial services.
Based on the Analysis presented in the KBV Cardinal matrix; Microsoft Corporation and Google LLC are the forerunners in the Market. In May, 2024, Microsoft Corporation teamed up with, an IT company, to launch GenAI-powered cognitive assistants for financial services: Wipro GenAI Investor Intelligence, Investor Onboarding, and Loan Origination. These solutions, powered by Azure OpenAI, aim to enhance market intelligence, accelerate onboarding, and streamline loan origination, providing personalized and efficient service to clients. Companies such as Amazon Web Services, Inc., Oracle Corporation, IBM Corporation are some of the key innovators in Market.
Modern consumers expect personalized financial services catering to their needs and preferences. They seek solutions that address their current financial situations and anticipate future requirements. With the insights generated by AI, financial institutions can rapidly innovate and customize their product offerings. Thus, increased focus on customer-centric financial solutions propels the market's growth.
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 in order to cater demand coming from the different industries. The key developmental strategies in the market are Partnerships, Collaborations & Agreements.
The competition in the generative AI market for financial services is intense, driven by fintech startups, tech giants, and established financial institutions. Key players focus on enhancing risk management, fraud detection, customer service, and personalized financial products, leveraging AI to streamline operations and deliver competitive advantages in a rapidly evolving industry.
Many countries in the Asia Pacific are experiencing significant digital transformation in their financial sectors, with increased investment in AI technologies. This trend is evident in countries like China, India, and Singapore, where financial institutions leverage Generative AI to enhance services and improve operational efficiencies. Thus, the Asia Pacific region would acquire 26% of the total market share by 2031.
The major strategies followed by the market participants are Partnerships as the key developmental strategy to keep pace with the changing demands of end users. For instance, In May, 2024, Oracle Corporation announced a partnership with Accenture, a global consultancy firm, to develop generative AI solutions. Leveraging Oracle Cloud Infrastructure, the two companies aimed to improve efficiency, resilience, and customer experiences, focusing initially on digital finance transformation and expanding to other industries. Moreover, In August, 2024, Accenture PLC signed a partnership with S&P Global, a capital market company. The partnership aimed to drive generative AI innovation in financial services.
KBV Cardinal Matrix - Market Competition Analysis
Based on the Analysis presented in the KBV Cardinal matrix; Microsoft Corporation and Google LLC are the forerunners in the Market. In May, 2024, Microsoft Corporation teamed up with, an IT company, to launch GenAI-powered cognitive assistants for financial services: Wipro GenAI Investor Intelligence, Investor Onboarding, and Loan Origination. These solutions, powered by Azure OpenAI, aim to enhance market intelligence, accelerate onboarding, and streamline loan origination, providing personalized and efficient service to clients. Companies such as Amazon Web Services, Inc., Oracle Corporation, IBM Corporation are some of the key innovators in Market.
Market Growth Factors
The volume of data generated in the financial sector has surged dramatically due to digital transactions, customer interactions, and regulatory requirements. In addition, Generative AI technologies offer sophisticated analytical capabilities that can identify patterns, trends, and correlations within financial data that may not be apparent through traditional analytical methods. In conclusion, the rising demand for advanced analytics and insights drives the market's growth.Modern consumers expect personalized financial services catering to their needs and preferences. They seek solutions that address their current financial situations and anticipate future requirements. With the insights generated by AI, financial institutions can rapidly innovate and customize their product offerings. Thus, increased focus on customer-centric financial solutions propels the market's growth.
Market Restraining Factors
The initial setup of Generative AI systems requires considerable financial investment. This includes the cost of acquiring advanced hardware, such as high-performance servers and GPUs, as well as specialized software and licenses. Integrating Generative AI solutions with existing financial systems and IT infrastructure can be complex and costly. Therefore, high implementation and operational costs are hampering the market's growth.
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 in order to cater demand coming from the different industries. The key developmental strategies in the market are Partnerships, Collaborations & Agreements.
Driving and Restraining Factors
Drivers
- Rising demand for advanced analytics and insights
- Increased focus on customer-centric financial solutions
- Accelerated adoption of digital transformation initiatives
Restraints
- High implementation and operational costs
- Concerns regarding data privacy and security
Opportunities
- Evolution of payment systems and transaction processes
- Rising investment in research and development of AI technologies
Challenges
- Ethical considerations and bias in AI algorithms
- Maintaining human oversight and accountability
Deployment Outlook
On the basis of deployment, the market is segmented into on-premises and cloud-based. In 2023, the on-premises segment attained 28% revenue share in the market. Many financial institutions still prefer on-premises solutions for various reasons, particularly regarding data security and compliance.End User Outlook
By end user, the market is divided into retail banking, corporate banking, insurance companies, investment firms, hedge funds, and FinTech Companies. The corporate banking segment procured 22% revenue share in the market in 2023. Corporate banks leverage Generative AI to manage complex transactions, assess credit risk, and enhance decision-making processes.
Application Outlook
Based on application, the market is divided into risk management, fraud detection, credit scoring, forecasting & reporting, and customer service & chatbots. The fraud detection segment attained 23% revenue share in the market in 2023. Financial institutions increasingly leverage Generative AI to analyze transaction patterns and identify anomalies, enhancing their real-time capabilities to detect fraudulent activities.By Regional Analysis
Region-wise, the market is analyzed across North America, Europe, Asia Pacific, and LAMEA. In 2023, the North America region witnessed 42% revenue share in the market. North America, particularly the United States, boasts a robust technological ecosystem with significant AI research and development investments.Market Competition and Attributes
The competition in the generative AI market for financial services is intense, driven by fintech startups, tech giants, and established financial institutions. Key players focus on enhancing risk management, fraud detection, customer service, and personalized financial products, leveraging AI to streamline operations and deliver competitive advantages in a rapidly evolving industry.
Recent Strategies Deployed in the Market
- May-2024: SAP SE announced a partnership with IBM, an American technology company, to integrate generative AI into SAP’s cloud solutions, enhancing business processes and industry innovation. This partnership aimed to optimize business outcomes, accelerate cloud adoption, and develop over 100 AI solutions across various industries, leveraging SAP Business Technology Platform.
- May-2024: Accenture announced the acquisition of Parsionate, a data consultancy. This acquisition would strengthen Accenture’s ability to deliver innovative, data-driven solutions across various industries, leveraging Parsionate’s expertise in data strategy and technology implementation.
- Apr-2024: Intel Corporation partnered with Infosys, an Indian IT company, to accelerate AI adoption in enterprises. The partnership would enhance performance, cost-effectiveness, and responsible AI use.
- Apr-2024: Salesforce, Inc. released new capablities on Einstien AI platform. The new capabilities help banks manage transaction disputes efficiently. Features include Transaction Dispute Management and Einstein Copilot Banking Actions, which automate tasks, reduce errors, and improve customer communications, addressing the rise in digital payment disputes and enhancing service agent productivity.
- Apr-2024: Oracle Corporation signed a partnership with Palantir, an American software company, to provide secure cloud and AI solutions for businesses and governments. This partnership would maximize data value, improve efficiency, and meet sovereignty and security standards.
List of Key Companies Profiled
- Amazon Web Services, Inc.
- Google LLC
- IBM Corporation
- Intel Corporation
- Microsoft Corporation
- Salesforce, Inc.
- OpenAI, LLC
- SAP SE
- Oracle Corporation
- Accenture PLC
Market Report Segmentation
By Deployment
- Cloud-based
- On-premises
By End User
- Retail Banking
- Corporate Banking
- Insurance Companies
- Investment Firms
- Hedge Funds
- FinTech Companies
By Application
- Risk Management
- Fraud Detection
- Credit Scoring
- Forecasting & Reporting
- Customer Service & Chatbots
By Geography
- 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
- Australia
- 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 Generative AI In Financial Services Market by Deployment
Chapter 6. Global Generative AI In Financial Services Market by End User
Chapter 7. Global Generative AI In Financial Services Market by Application
Chapter 8. Global Generative AI In Financial Services Market by Region
Chapter 9. Company Profiles
Companies Mentioned
Some of the key companies in the Generative AI In Financial Services Market include:- Amazon Web Services, Inc.
- Google LLC
- IBM Corporation
- Intel Corporation
- Microsoft Corporation
- Salesforce, Inc.
- OpenAI, LLC
- SAP SE
- Oracle Corporation
- Accenture PLC
Methodology
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