Chatbot Market In BFSI Research, 2032
The global chatbot market size was valued at $1.3 billion in 2023, and is projected to reach $11.6 billion by 2032, growing at a CAGR of 27.5% from 2024 to 2032.
A chatbot is defined as a computer program that is used to conduct an online chat conversation by simulating a conversation via text or text-to-speech
Market Introduction and Definition
Chatbot has become a preferred option in the BFSI sector to describe the essentials of an organization or solve queries, as every time face-to-face conversation with the required banking technical/managerial support is not feasible. This novel development facilitates conversing with a user in natural language through messaging applications, websites, mobile apps, and through the telephone.
Further, chatbots are at the front of the banking industry’s new automation efforts aiming at conversational banking. Formerly, ATMs and apps delivered machine-based support in the past, while chatbots and other conversational banking tools enable financial institutions to automate customer interactions. In addition, chatbots are implemented across the BFSI sector to provide a better user experience, interact with customers in place of advisors, speed up response time, ease workloads, and others. Also, banking chatbots leverage AI and ML technologies to deliver convenient, efficient, and personalized banking experiences to customers, while also streamlining operations for financial institutions.
Key Takeaways
The chatbot market share study covers 20 countries. The research includes a segment analysis of each country in terms of value for the projected period 2024-2032.
More than 1,500 product literature, industry releases, annual reports, and other documents of major chatbots in market BFSI industry participants, along with authentic industry journals, trade associations' releases, and government websites, have been reviewed to generate high-value industry insights.
The study integrated high-quality data, professional opinions and analysis, and critical independent perspectives. The research approach is intended to provide a balanced view of global markets and to assist stakeholders in making educated decisions to achieve their most ambitious growth objectives.
Key Market Dynamics
The growth of the chatbot market in BFSI is also driven by factors such as the surge in integration of chatbots with social media, increased awareness toward chatbots, and the surge in popularity of chatbots in the financial sector. However, high initial and upgradation costs of banking chatbots, lack of product differentiation, and data security & privacy concerns restrain the development of the market. In addition, the implementation of technologies, such as interference engines, cloud-based deployment, application programming interfaces (API) , and natural language processors (NLP) , along with the untapped potential of emerging economies are expected to provide ample opportunities for the chatbot market development during the forecast period.
The rise in demand for better customer relationship management (CRM) to improve customer satisfaction with faster response time and convenient product options is expected to drive demand for the chatbot market in the BFSI industry. In addition, banking chatbots help improve consumer engagement and focus on understanding customers' desires and specific market requirements, due to its capability to rationalize the whole user experience and enhance customer relationship management (CRM) in the banking, financial services, and insurance industries, which is expected to pave the adoption of chatbots in the BFSI sector. In addition, governments across the world are constantly promoting companies that deliver advanced chatbots integrated with artificial intelligence (AI) and machine learning (ML) technology, resulting in a significant growth prospect for the chatbot industry in BFSI sector.
Patent Analysis: Global Chatbot Market in BFSI
The patent landscape of the global chatbot market in BFSI reveals a dynamic field in recent years, driven by a significant contribution from technology giants, fintech innovators, and major financial institutions. Key trends such as a growing focus on advancements in natural language processing (NLP) , machine learning, security, and integration capabilities are also expected to contribute to the chatbot market growth. Further, leading market vendors are continuously innovating to enable secure communication, data encryption, and user authentication methods to ensure secure interactions between chatbots and users. Tech giants, such as IBM Corporation, Microsoft Corporation, and Google hold various patents in the field of AI, NLP, and chatbot technologies.
The U.S. typically has the largest number of patent filings, owing to the rise in the chatbot market among BFSI users and the extensive market potential for the foreign-based financial service industry in the country. For instance, in May 2023, financial giant JPMorgan Chase filed a trademark application for a finance-themed chatbot called IndexGPT. According to the application with the United States Patent and Trademark Office (USPTO) , the chatbot can be used for advertising and marketing services, an index of securities values, and online financial information and investment advice. Therefore, many financial service companies have been particularly realizing the potential and ability of AI to process data, which significantly creates a significant growth prospect for the chatbot market in BFSI.
Market Segmentation
The chatbot market in BFSI is segmented into component, platform type, end user, application, and region. Based on component, the market is divided into solution and services. On the basis of platform type, it is bifurcated into web-based and mobile-based. As per the end user, the market is classified into banks, insurance companies, and others. On the basis of application, the market is categorized into customer support, branding & advertisement, data security & compliance, and others. Region-wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Regional/Country Chatbot Market Outlook
The U.S. emerged as the leading market for the global chatbot market in BFSI in 2023. This is attributed to the fact that considerable developments in financial technologies and the expansion of IT infrastructure in the BFSI sector are some of the major growth factors in the country. Moreover, U.S. companies are working constantly to develop and the commercial applications of chatbot technologies, shifting from first-generation chatbots to advanced technologies. This rapid shift towards advanced chatbot technologies is anticipated to contribute towards the growth of the U.S. chatbot market in BFSI sector. Further, the rapid rise in innovations in fintech and virtual assistant technologies has indeed facilitated the deployment and integration of chatbots, enabling seamless integration with existing systems and improved security protocols, which is expected to drive the chatbot market in BFSI growth.
Further, technological enhancements in AI and ML technologies have made chatbots capable, reliable, and efficient in understanding and processing customer queries is also supporting the growth of the chatbot market in BFSI. According to November 2023 data from Google and Ipsos, nearly 49% of U.S. adults have used an AI chatbot for customer service in the past 12 months. In addition, the shift towards digital banking solutions drives the adoption of chatbots as a key component of digital customer interaction, which promotes the demand for the chatbot market forecast period.
In June 2023, BNP Paribas’s Securities Services business launched its new virtual agent, NOA (NextGen Online Assistant), on its client services portal NeoLink. NOA leverages the recent cognitive technology of Amelia, a trusted leader in Enterprise Conversational AI. As part of a progressive rollout program, it is now accessible on NeoLink for institutional clients based in the U.S., the UK, Jersey, Ireland, Colombia, and Brazil, and is deployed to additional countries throughout the year.
In December 2022, Deutsche Bank (Germany) declared a multi-year innovation partnership agreement with NVIDIA to accelerate the adoption of artificial intelligence (AI) and machine learning (ML) in the financial services sector. Integrating Deutsche Bank’s financial industry expertise with NVIDIA’s leadership in AI and enhanced computing is likely to hasten the development of a wide range of regulatory-compliant AI-powered services. The partnership is projected to support Deutsche Bank’s cloud transformation journey, for instance by using AI and ML to streamline and accelerate cloud migration decisions.
Industry Trends
In March 2024, Zapier, the workflow automation platform for businesses of all sizes, introduced its newest product, Chatbots, a free AI-powered chatbot builder customized to facilitate businesses to generate custom external-facing chatbots that respond to customer questions, resolve issues, and foster leads. With Zapier Chatbots, users can generate unique AI chatbots that use their knowledge and match their brand.
In November 2023, Amazon introduced its business chatbot powered by generative artificial intelligence capable of integrating content, streamlining day-to-day communications, and facilitating employees with tasks like generating blog posts. These chatbots are next-generation of AI systems that can converse, generate readable text on demand, and even create novel images and videos from a vast database of digital books, online writings, and other media.
In January 2023, Inbenta, a provider of AI-powered chatbots and associated solutions, closed a $40 million funding round led by Tritium Partners, bringing the startup’s total raised to over $60 million. This funding is likely to facilitate Inbenta to attain its business transition from consulting to offering conversational AI as a service — inclusive of AI-powered chatbots, knowledge management, and search engine tools.
Competitive Landscape
The major players operating in the chatbot market in BFSI include [24]7.ai, Inc., Acuvate, Amazon Corporation, Aivo, Artificial Solutions, Creative Virtual Ltd., eGain Corporation, IBM Corporation, Inbenta Technologies Inc., Next IT Corp., and Nuance Communications, Inc. Other players in the chatbot market in BFSI include Google LLC, Kasisto, LivePerson, Microsoft Corporation, and others.
Recent Key Strategies and Developments Chatbot Industry in BFSI
In May 2024, TELUS International, a leading digital customer experience (CX) innovator completed the partnership agreement with eGain Corporation, the leading AI knowledge platform for customer service. TELUS International provides the eGain Knowledge Hub as an integrated solution in its Contact Center as a Service (CCaaS) offering. eGain's knowledge management system ensures that chatbot responses are reliable with live support, ensuring consistency across touchpoints. Further, each chatbot interaction is customized to meet the consumer’s needs, offering natural and personalized responses that lead to greater satisfaction and deeper engagement.
In November 2023, NatWest and IBM collaborated to introduce the bank’s virtual assistant, Cora, which is likely to utilize generative AI to deliver consumer access to a broad range of information through conversational interactions. The bank is also expected to be among the first in the UK to deploy generative AI with a virtual assistant enabling a safe, intuitive, and accessible experience in its digital services. Harnessing the capability of ethical AI forms part of the bank’s wider strategy, collaborating with IBM and other experts to facilitate customers attain financial wellbeing through personalized support.
Key Sources Referred
Banking Industry Architecture Network (BIAN)
International Association for Trusted Blockchain Applications (INATBA)
Financial Services Information Sharing and Analysis Center (FS-ISAC)
Institute of Electrical and Electronics Engineers (IEEE) Standards Association
Association for Financial Technology (AFT)
AI in Financial Services (AIFS)
European Banking Federation (EBF)
International Financial Cryptography Association (IFCA)
Key Benefits For Stakeholders
This report provides a quantitative analysis of the chatbot market segments, current trends, estimations, and dynamics of the chatbot market analysis from 2024 to 2032 to identify the prevailing chatbot market opportunity.
The market research is offered along with information related to key drivers, restraints, and opportunities.
Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
In-depth analysis of the chatbot market in bfsi segmentation assists to determine the prevailing market opportunities.
Major countries in each region are mapped according to their revenue contribution to the global market.
Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
The report includes the analysis of the regional as well as global chatbot market trends, key players, market segments, application areas, and market growth strategies.
Chatbot Market Report Highlights
| Aspects | Details |
 Market Size By 2032 | USD 11.6 Billion |
 Growth Rate | CAGR of 27.5% |
 Forecast period | 2024 - 2032 |
 Report Pages | 250 |
 By Component |
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 By Platform Type |
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 By End User |
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 By Application |
|
 By Region |
|
 Key Market Players | LivePerson, [24]7.ai, Inc., Acuvate, Next IT Corp., Aivo, Nuance Communications, Inc., IBM Corporation, Inbenta Technologies Inc., Creative Virtual Ltd., eGain Corporation, Kasisto, Amazon Corporation, Google LLC, Artificial Solutions |
Analyst Review
Chatbot is a computer program used by technology startups to develop a communication link that would work with today’s digital generation and provide them with advice, actions, and plans. Adoption of artificial intelligence based chatbots has increased over a period of time for activities such as bank statement requisition, checking balances, spend breakdown analysis, credit card balance, and payments. BFSI sector is one of the earliest adopters of chatbot, which have witnessed an increase in demand from its large customer base. In addition, the vast development in artificial intelligence (AI) and machine learning, because of which chatbots have evolved from simple answer machines to a smart platform for engaging consumers fuel the growth of the chatbot market in BFSI sector.
Furthermore, emerging trends such as increase in integration of chatbots with social media, growth in popularity of live chat software, and rise in adoption of chatbot as a service create lucrative opportunities for the market. Some of the key players profiled in the report include Artificial Solutions, Nuance Communications, Inc., eGain Corporation, Creative Virtual Ltd., Next IT Corp., 24/7 Customer Inc., Codebaby (Idavatars), Inc., Anboto, Inbenta Technologies Inc., and Aivo. The market players have adopted various strategies to enhance their product portfolio and to increase their market penetration. Moreover, rise in investment for research to develop new products to increase their customer base strengthens their foothold in the global chatbot market in BFSI.
The total market value of chatbot market in BFSI is $1.3 billion in 2023.
The market value of chatbot market in BFSI in 2032 is $11.6 billion.
The forecast period for chatbot market in BFSI is 2024 to 2032.
The base year is 2023 in chatbot market in BFSI.
A chatbot is an AI-powered tool that interacts with users through text or voice. In BFSI, it is used for customer service, answering queries, processing transactions, and providing personalized financial advice.
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