According to a recent report published by Allied Market Research, titled, “Chatbot Market in BFSI by Component, Platform Type, End User, and Application: Opportunity Analysis and Industry Forecast, 2020-2027,” The global chatbot market size was valued at $0.49 billion in 2019, and is projected to reach $3.39 billion by 2027, growing at a CAGR of 27.3% from 2020 to 2027.
Chatbot is a computer program designed to simulate conversation with human users especially over the Internet. Chatbot has become a preferred option in the BFSI sector to describe the essentials of an organization or solving queries, owing to the fact that every time face-to-face conversation with the required banking technical/managerial support is not feasible. The major factors that drive the market growth include increase in need to improve customer relationship management (CRM), advantages of chatbots over other customer support options, and rise in integration of chatbots with social media platforms.
However, increased initial installment cost and lack of product differentiation are anticipated to hamper the market growth.
By end user, the banks segment dominated the chatbot market in BFSI in 2019, and is projected to continue this trend during the forecast period. However, the insurance companies segment is expected to witness the highest growth, owing to increase in adoption of AI-based chatbots to sell policies and assist customers with insurance advice.
The global chatbot market share was dominated by North America in 2019, and is expected to maintain this trend during the forecast period. This is attributed to high growth of financial technologies as well as large IT spending in the BFSI sector in this region. Furthermore, Asia-Pacific and LAMEA are expected to witness significant growth in the near future, owing to lucrative opportunities offered by countries such as China, India, Singapore, and Brazil. Major shift toward digital and mobile banking in countries, such as India and China, majorly contributes to the chatbot market growth.
The chatbot market in BFSI has experienced increased revenue, owing to complete lockdown & shutdown of banks, insurance companies, and financial institutions, including the ones that provide online services across the globe. In addition, the unprecedented pandemic situation and social distancing norms limited the use of physical channels. Therefore, companies in the BFSI sector have been implementing chatbot technology to overcome the negative impact and develop better user experience in the market.
Key findings of the study
- By platform type, the web-based segment led the chatbot market in BFSI in terms of revenue in 2019.
- Depending on component, the solution segment garnered the highest market share in 2019.
- North America generated the highest revenue in 2019.
The key players profiled in the report include 7.ai, Inc, Acuvate, Aivo, Artificial Solutions, Creative Virtual Ltd., eGain Corporation, IBM Corporation, Inbenta Technologies Inc., Next IT Corp., and Nuance Communications, Inc. These players have adopted various strategies to increase their market penetration and strengthen their foothold in the industry.