PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1515393
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1515393
Artificial Intelligence in BFSI Market size was valued at USD 23,514.2 Million in 2023, expanding at a CAGR of 31.00% from 2024 to 2032.
Artificial intelligence (AI) in banking, financial services, and insurance (BFSI) is the application of advanced algorithms and computational models to replicate human intellect in financial activities. It comprises machine learning (ML), natural language processing (NLP), and robotic process automation (RPA). AI in BFSI is frequently utilized for fraud detection, credit scoring, personalized banking, algorithmic trading, risk management, customer support bots, insurance predictive analysis, regulatory compliance, debt collection, and portfolio management. It increases accuracy, efficiency and improves the client experience. It also enables speedier processing, real-time decision-making, and the automation of repetitive processes.
Artificial Intelligence in BFSI Market- Market Dynamics
Increased Demand for Improved Fraud Detection
The BFSI sector is constantly confronted with the potential of fraud, and AI has emerged as an effective tool in combatting this issue. AI algorithms based on machine learning (ML) are extremely effective in detecting strange patterns and anomalies in massive volumes of data that may indicate fraudulent activity. Furthermore, AI can track transactions in real time and flag suspicious activity based on characteristics like transaction size, frequency, location, and timing. It can also identify patterns in customer activity that may signal identity theft or account takeover. Furthermore, machine learning (ML) models can learn from each fraudulent incident, continuously improving their detection skills. This ability to detect and inform about suspected fraud quickly reduces financial losses, protects customers, and helps to maintain the institution's reputation.
Artificial Intelligence in BFSI Market- Key Insights
As per the analysis shared by our research analyst, the global market is estimated to grow annually at a CAGR of around 31.00% over the forecast period (2024-2032)
Based on Offering segmentation, the software sector dominated the market in 2023.
Based on Solution segmentation, in 2023, the fraud detection and prevention category had the highest revenue share in the market.
Based on region, North America was the leading revenue generator in 2023
The Global Artificial Intelligence in BFSI Market is segmented based on Offering, Solution, Technology, and Region.
The market is divided into three categories based on Offering: Hardware, Software, and Services. The software category dominated the market in 2023. The banking sector accounts for the majority of the software segment's revenue share in the worldwide AI in BFSI market because it employs sophisticated AI-driven solutions such as fraud detection, which are in high demand among clients. Similarly, complex and distinct AI systems have the potential to grasp explicit banking requirements, hence improving professionalism and accuracy. To stay current, financial institutions have turned to purchasing AI technologies to assist in streamlining activities, improving judgment and service delivery.
The market is divided into six categories based on Solutions: Chatbots, Fraud Detection and Prevention, Anti-Money Laundering, Customer Relationship Management, Data Analytics and Prediction and Others. In 2023, the fraud detection and prevention category had the largest revenue share of the market. BFSI institutions are investing in AI-powered fraud prevention systems to protect digital transactions, authenticate user identities, and detect suspicious activity across numerous channels. As a result of these reasons, the segment will experience substantial growth in the next years.
Artificial Intelligence in BFSI Market- Geographical Insights
Geographically, this market is widespread in the regions of North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. These regions are further divided as per the nations bringing business. North America dominates the market in 2023. North America has a strong technological foundation and widespread digitalization in its banking sector, resulting in a favorable climate. The existence of prominent AI technology providers continues to stimulate early adoption, allowing for AI integration and growth in North America's banking sector.
Asia-Pacific is predicted to see the highest CAGR during the projection period. AI in the banking business is rising in Asia Pacific as the fintech industry grows, digital transformation accelerates, and an increasing number of individuals have access to digital banking services. Growing economies in Asia Pacific, such as China and India, are fueled by the establishment of new fintech firms and aggressive investments from the established economy.
The competitive landscape for AI in the BFSI market is highly active and tough. Various banking, financial services, and insurance (BFSI) firms are actively investing in AI technologies to improve operations, client experiences, and efficiency. Salesforce, Inc., Microsoft Corporation, Google LLC, and IBM Corporation are among the key industry players. These businesses use AI for fraud detection, customer service automation, risk management, personalized financial recommendations, and process automation.
In April 2024, Salesforce introduced new AI-powered capabilities built on the Einstein 1 Platform to assist banks in handling transaction disputes more swiftly and efficiently. Transaction Dispute Management and Einstein Copilot Banking Actions are two capabilities that combine transaction data from banking platforms with Salesforce customer data to automate manual tasks, reduce errors, resolve issues, and improve customer communications all from a single platform.
GLOBAL ARTIFICIAL INTELLIGENCE IN BFSI MARKET KEY PLAYERS- DETAILED COMPETITIVE INSIGHTS
Salesforce, Inc
Microsoft Corporation
GOOGLE LLC
IBM Corporation
Amazon Web Services, Inc.
SAP SE
Oracle
Baidu, Inc.
Palantir Technologies Inc.
Intel Corporation
Others