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Artificial Intelligence (AI) in BFSI Market Size By Component (Solution [Chatbot, Customer Behavior Analytics, Customer Relationship Management (CRM), Data Analytics & Visualization, Fraud Detection], Service [Professional Service, Managed Service]), By Technology (Machine Learning, Natural Language Processing (NLP), Computer Vision), By Application (Back Office/Operation, Customer Service, Financial Advisory, Risk Management, Compliance & Security), By End-use (Bank, Insurance, Wealth Management), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2022 – 2028

  • Report ID: GMI2605
  • Base Year: 2021
  • Report Format: PDF

Industry Trends

Artificial Intelligence (AI) in BFSI Market size exceeded USD 15 billion in 2021 and is slated to grow at over 35% CAGR between 2022 and 2028.
 

The industry is witnessing rapid growth in the adoption of big data and machine learning algorithms as BFSI institutes are preparing themselves for the next wave of digital disruption. In 2021, the fintech sector showcased around 68% increase in investments across the globe compared to 2020. Moreover, the integration of AI into the BFSI toolchain in various digital financial services has also accentuated AI in BFSI market demand.
 

Artificial Intelligence (AI) in BFSI Market

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The COVID-19 outbreak has impacted BFSI enterprises severely as economic slump coupled with poor stock market sentiments and ongoing liquidity concerns has hampered business growth. AI in BFSI technologies have emerged as a viable solution to prevent systemic failures, implement fraud detection & prevention techniques, and help BFSI organizations in reducing operational risks amid the ongoing pandemic.
 

The artificial intelligence in BFSI market is expected to undergo a dynamic transition amidst the ongoing pandemic as advancements in AI technologies, such as NLP and image recognition. The rising competition has pressurized BFSI enterprises to cut downtime to market for new digital solutions.
 

Increased focus on personalized ad campaigns for target customers to spur the CRM segment in Germany

Germany AI in BFSI Market Size By Component

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In Germany, the AI in BFSI market from solutions segment held more than 85% of the revenue share in 2021 and is estimated to exhibit steady growth during 2022 to 2028. The growing popularity of Customer Relationship Management (CRM) has accentuated the demand for AI in BFSI solutions. BFSI institutes are heavily relying on CRM solutions to gain a better understanding of the customers, product segmentation, marketing campaign management, appropriate targeting, maintenance of long-term profitability, and mutually beneficial relationships with customers.
 

Banking institutions pressurized to adopt machine learning based algorithms as money laundering cases spike in Mexico

Mexico AI in BFSI Market Share By Technology

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In Mexico, the AI in BFSI machine learning segment captured about 35% of market share in 2021. This is attributed to the shifting preference of regional BFSI enterprises toward machine learning algorithms for a wide range of applications including fraud detection, algorithmic trading, and anti-money laundering.
 

Consequently, banks are deploying machine learning-based algorithms to combat illicit transactions. For instance, in March 2021, Mexican neobank Albo partnered with Acuant to incorporate AI-infused KYC and documentation solutions for AML compliance.
 

AI-assisted decision making for robust investment portfolio to surge the uptake of financial advisory tools in the U.S.

In the U.S., the Ai in BFSI market from financial advisory segment is set to observe around 35% growth rate through 2028 due to the increasing importance of machine learning-based investment algorithms. The wealth management companies are offering robo-advisors that can help their customers better manage their money. Through personalization, chatbots, and customer-specific models, these robo-advisors can provide high-quality guidance on investment decisions and are available whenever the customer needs assistance. The increasing usage of AI in BFSI tools to mitigate investment risks has created new growth opportunities.
 

Rising need to automate banking operations in theUK banking sector

UK AI in BFSI Market Size By End-use

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In 2021, the UK bank segment generated over USD 400 million revenue led by rising awareness on the usage of AI in BFSI tools by banks to increase their operational efficiency and provide better customer experience. The increasing competition from fintech companies will promote banks to opt for more advanced and intelligent solutions & services, creating new growth avenues for the AI in BFSI market.
 

Banks in the UK are also focusing on the improvement of their operations through digital solutions and are increasing customer empowerment along with the control of financial matters. They are also exploring new applications in AI, such as financial risk assessment and customer profiling, driving the regional market.
 

Hefty investments in digitalization of the fintech sector inthe Europe

Europe AI in BFSI Market Share By Country

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Europe accounted for nearly 20% of the artificial intelligence in BFSI market share in 2021 impelled by increasing digitalization of the financial sector and growing investments in AI. In addition, the growing penetration of AI for the development of novel technologies, such as robotic software automation, is the primary factor boosting the market share.
 

European SMEs are increasingly developing bespoke artificial intelligence systems in the BFSI sector to introduce digital technologies. For instance, France has approximately 270 AI start-ups and above USD 325 million raised in funding.
 

Launch of innovative solutions with enhanced features to gain a competitive edge

The global industry is characterized by intensified rivalry amongst major players and fueled by strategic partnerships & new product launches. The emergence of several SMEs in the market, such as Descartes Lab, Digital Reasoning, and Cape Analytics, has exerted immense strain on established players to continuously launch new products with added functionalities to maintain revenue share and profitability.
 

The key companies operating in the AI in BFSI market include Alibaba Group Holding Limited, Amelia US, LLC (IpSoft), ATOS SE, Avaamo, Inc., AWS, Inc., Baidu, Inc., Cape Analytics LLC, CognitiveScale, Inc., ComplyAdvantage (IVXS UK Limited), Digital Reasoning (Smarsh), Google LLC (Alphabet, Inc.), IBM Corporation, Inbenta Technologies, Inc., Intel Corporation, Interactions, LLC, Lexalytics, Inc., Microsoft Corporation, NICE Ltd., Nuance Communications, Inc., NVIDIA Corporation, Oracle Corporation, Palo Alto Networks, Inc., SalesForce.com, Inc., SAP SE , SAS Institute, Inc., and Tencent Holdings Limited.
 

This market research report on artificial intelligence (Ai) in BFSI includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2018 to 2028 for the following segments:

Market, By Component

  • Solution
    • Chatbot
    • Customer Behavior Analytics
    • Customer Relationship Management (CRM)
    • Data Analytics and Visualization
    • Fraud Detection
    • Others
  • Service
    • Professional Services
    • Managed Services

Market, By Technology

  • Machine Learning & Deep Learning
  • Natural Language Processing (NLP)
  • Computer Vision
  • Others

Market, By Application

  • Back Office/Operations
  • Customer Service
  • Financial Advisory
  • Risk Management, Compliance & Security
  • Others

Market, By End-Use

  • Bank
  • Insurance
  • Wealth Management

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Spain
    • Sweden
    • Switzerland
  • Asia Pacific
    • China
    • Japan
    • India
    • Australia
    • South Korea
    • Singapore
  • Latin America
    • Brazil
    • Mexico
  • Middle East & Africa
    • South Africa
    • UAE
    • Israel

 

Authors: Preeti Wadhwani, Smriti Loomba

Frequently Asked Questions (FAQ) :

The market size of AI in BFSI crossed USD 15 billion in 2021 and is anticipated to record over 35% CAGR during the forecast period of 2022-2028.

In Mexico, machine learning segment held over 35% of the revenue share in 2021 as machine learning has a wide range of applications in BFSI enterprises, such as algorithm trading, fraud detection, and anti-money laundering.

The bank segment generated more than USD 400 million in revenue for the AI in BFSI industry in the U.K. in 2021 as banks are integrating AI into various BFSI tools to enhance their operational efficiency and offer better customer experience.

Cape Analytics, Digital Reasoning, Verint, and Descartes Lab, among many others, are the main participants of this market.

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Premium Report Details

  • Published Date: Mar 2022
  • Companies covered: 26
  • Tables & Figures: 455
  • Countries covered: 19
  • Pages: 300

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