AI in BFSI Market size is anticipated to cross USD 100 billion by 2032, according to a new research report by Global Market Insights Inc.
Banks are significantly investing in AI for risk reduction, such as in fraud detection, compliance, and cybersecurity, in light of the rise in financial crimes. The Reserve Bank of India recorded frauds of Rs 60,414 crore in 2021-22. As fraud schemes get more complex and sophisticated, the development of AI and ML technologies work in tandem to provide protection to firms. The increasing use of fraud detection due to increased privacy and security breaches in banks is poised to drive the market expansion. Additionally, many wealth managers are initiating platform modernization to create scalable next-generation platforms and are using customer-focused and tech-enabled business strategies.
Growing inclination toward digital services to enhance the industry outlook
The AI in BFSI market from the services segment accounted for USD 1 billion in revenue in 2022. The COVID-19 outbreak urged banks, brokers, and other financial organizations to turn digital innovations into essential services. Banks can maintain and safeguard a high-quality IT infrastructure while getting assistance from AI and ML service providers. Additionally, technology firms are creating advanced services to consolidate their market share. In January 2022, Temenos, a financial software provider, debuted its Buy-Now-Pay-Later banking service to help banks and Fintech firms penetrate new markets.
Rising need in financial institutions to augment managed services demand
Under services, the AI in BFSI market from the managed services segment is expected to observe notable growth through 2032, as they are increasingly being employed by financial institutions for upgrading their technical operations and infrastructure while lowering responsibilities. Furthermore, managed service providers are using AI technology for a variety of tasks, including managing network traffic, resolving mechanical problems without human intervention, using chatbots to boost the output of human technicians, and other tasks, which is set to stimulate the market growth.
Favorable public sector initiatives to promote digitalization to bolster computer vision industry growth
In terms of technology, the computer vision segment dominated around USD 3 billion in 2022. The report cites that the proliferation of digitalization in the finance sector with support from public organizations is expected to facilitate the market revenue. For instance, the World Bank's Digital Development Partnership connects partners from the public and private sectors to expedite safe and equitable digital transformation in developing nations. Additionally, several banks have begun installing camera software to monitor employees, assess client preferences, and observe activities around ATMs’ premises.
Browse key industry insights spread across 300 pages with 400 market data tables and 46 figures & charts from the report, “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, 2023 – 2032” in detail along with the table of contents:
Growing deployment of AI systems for automating internal procedures to favor back office/operation segment
The back office/operation application segment is estimated to depict over 20% CAGR through 2032. By introducing cutting-edge technology for better analytics and decision-making methodologies, as well as cost-reduction through automated operations, AI/ML and associated technologies are reshaping the sector. Additionally, AI & ML systems boost prudential oversight and improve systemic risk surveillance at central banks. They are also revolutionizing internal operations by automating procedures, employing predictive analytics to improve product offerings, and delivering more effective risk and fraud management processes and regulatory compliance.
Growing need for fraud detection applications to amplify insurance the industry revenues
The insurance company segment is predicted to hold over 25% share of the artificial intelligence (AI) in BFSI market revenue by 2032. AI and automated data science ML tools help insurers to become more equitable and customer centric. According to the FBI, the massive U.S. insurance sector, consisting of over 7,000 businesses, generating over $1 trillion in premiums annually, has a substantial impact on insurance fraud by providing more possibilities and incentives for engaging in fraudulent activities.
Rapid penetration of digital technologies to augment Asia Pacific industry share
The Asia Pacific AI in BFSI industry is slated to grow at a CAGR of 20% between 2023 and 2032, owing to rapid digitization, which is increasing financial inclusion with smartphones and technological services that are proving to be critical entry points into personal finance. Additionally, notable efforts by government and regulatory authorities to promote digital banking across APAC countries are projected to propel the market revenue. In October 2022, the Reserve Bank of India announced plans to widely use sophisticated analytics, AI, and ML to analyze its massive database and enhance regulatory supervision of banks and NBFCs.
Development of novel virtual assistants to define the market outlook
Major players involved in the AI in BFSI market are viz., ATOS SE, AWS Inc., Google LLC (Alphabet, Inc.), IBM Corporation, Microsoft Corporation, NVIDIA Corporation, and Tencent Holdings Limited. These companies are employing new technology for innovative product releases to expand their global reach. For instance, in February 2022, multinational technology corporation IBM and leading investment bank TD Securities launched an AI-based virtual assistant powered by IBM Watson Assistant to assist consumers with their inquiries on the TD metal digital platform, which has been designed to also aid investors in strengthening their portfolios and receiving additional benefits.
Explore More on Related Topics: