According to a new report published by Allied Market Research, titled, "Artificial Intelligence in BFSI Market by Offering, Solution, and Technology: Global Opportunity Analysis and Industry Forecast, 2019-2026," the global artificial intelligence in BFSI market size was valued at $17,765.2 million in 2018, and is projected to reach $247,366.6 million by 2026, growing at a CAGR of 38.0% from 2019 to 2026.
Artificial intelligence (AI) is illustrated by machines rather than natural intelligence displayed by humans. Intelligence in machines is programmed to think like humans and mimic their actions. In addition, machines are designed to rationalize and function like human mind, such as learning, planning, identifying patterns, problem solving, and decision making to achieve a specific goal. Therefore, it has become an essential part of technology in the BFSI industry. In financial institutions and other major finance industries, AI has become a core adaption and is expected to change the overall scenario of service offerings.
Utilization of various AI technologies such as deep learning, natural language processing, chatbots, and robo-advisors across financial products and services are some of the factors that fuel the market growth. In addition, proactive customer experience by automating backend process to reduce human error, reduction in fraud detection, and risk mitigation with advance technologies in artificial intelligence in BFSI industry, drive the market growth. However, higher cost for implementation of AI technologies, rise in security concerns, and inadequacy of trust while issuing customer data restrain the market growth. With new entrants in the FinTech (Financial Technology) industry, change in customer behaviour, initiatives in government regulations, and traditional banking system pose as opportunities for the market growth
On the basis of offerings, the software segment dominated the artificial intelligence in BFSI market in 2018. The software segment accounted for the largest revenue as software offerings benefit financial industries immensely to track transactions, verify data, generate reports, and extract information related to the customers. In addition, security and analysis of know your customer (KYC) process for verification are highly simplified by software tools, becoming a major artificial intelligence in BFSI market trends.
Depending on solution, the chatbots segment generated the largest revenue in 2018 and is anticipated to continue the same during the artificial intelligence in BFSI market forecast period. Chatbots provide banks and other financial institutions to quickly assist common customer queries, enhance on-boarding process, and improve effectiveness of sales. In addition, it includes cost-saving, reduces customer acquisition cost on a large scale and collects real-time feedback from customers in the market.
Key Findings of the Artificial Intelligence in BFSI Market:
- The hardware segment is expected to be the fastest growing segment during the forecast period, in terms of value.
- The U.S. dominated the North America artificial intelligence in BFSI market in 2018 and is projected to grow at a CAGR of 35.5% from 2019 to 2026.
- In terms of revenue, the natural language processing segment accounted for the highest revenue in AI in BFSI market in 2018.
North America held largest artificial intelligence in BFSI market share in 2018 and is anticipated to remain dominant during the forecast period. The global artificial intelligence in BFSI market is growing in North America due to countries prioritizing technological advancements, with higher investments in artificial intelligence technologies, aiming at improving customer services and increasing revenue in their businesses. The key players operating in the global AI in BFSI market include as Alphabet Inc. (Google), Baidu, Inc., Inbenta Technologies, Inc., Intel Corporation, International Business Machines Corporation (IBM),Microsoft Corporation, Oracle Corporation ,Palantir Technologies Inc., SAP SE,salesforce.com, inc..Other players operating in the market are Lexalytics Inc., Digital Reasoning Inc., Interaction LLC, Inc., Ipsoft Inc., and Zest Finance.