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Report Code: IM10834
Category : Software & Services
The global artificial intelligence (AI) market in BFSI has gained significant growth due to increasing usage of AI and machine learning technologies around the world. Other factors driving the growth of the global AI market in BFSI include increase in large and complex dataset, also known as big data, in the banking industry. Big data enables companies to democratize the data. Besides, it helps the owners to access, manage and analyze their data without configuring virtual machines and reduce costs.
Data analytics have made it easier to monitor and evaluate the huge amount of client’s personal information. Big data helps banks to use personal information of their clients to constantly monitor their transaction behaviors in real-time. This information further helps the banks to provide their clients the resource in accordance to their needs and enhance their own profitability.
Banks across the globe are already using the AI technology to detect payment fraud. They are presently using this technology to identify undesirable behavior of users and detect mishandling of data. This technology would further be used to fight back with methods like predictive analytics, which analyze the past and forecast customers spending behavior, location data from smart phones and wearable devices. The technology, thus, enables a computer to behave and take decisions like a human being. AI technology in the banking industry identifies connections and patterns, which remain unidentified by humans. It also helps to improve customer personalization process and tries to answer the questions about banking in real-time.
The key trend observed in the BFSI industry is increased emphasis on customer experience. The smart machines and technologies extract the data, which provides customer insights and further helps the industry to enhance its service provisions. According to a recent report, customers require personalization in their banking experience. They want their financial institution to understand their needs and deliver personalized offers. Personalized communications and advice, as provided by the AI technology, can be portrayed by the robo advisors. With AI technology, algorithm-based portfolio can be rebalanced regularly to maintain the guidelines of an investment and operate at costs. The robo advisors were promoted by fintech firms like Betterment and Wealthfront, but traditional brokers also offers these now.
Apart from robo advising, there are many financial institutions globally, which are using AI technology to improve personalized communication and offers. It is anticipated that after few years, the use of solution development and custom marketing will be the primary focus for financial organizations to improve customer experience. Increasing adoption of machine learning technology is creating opportunities for the artificial intelligence market in BFSI industry. Over the past few years, the machine learning technology has advanced rapidly and it has been offering more efficient and cost effective solutions that banks could implement even with their over-burdened IT systems. Presently, AI technologies are increasingly being applied in the banking industry, mainly toward knowledge management, identity authentication, market analysis, customer relationship management, anti-money laundering and risk control. The development of AI technology requires huge costs as it is considered very complex machine. Repair and maintenance of this technology requires huge costs. They have software programs which need frequent upgradation to cater to the needs of the changing environment.
Geographically, North America is the largest market for AI in BFSI industry, owing to higher usage in big data and analytics in this region. Continuous financial support from the government along with technological upgradation has been helping to grow the North American market. The AI market in BFSI is also expected to witness the fastest growth in Asia-Pacific during the forecast period, due to increasing adoption of robo advisors and usage of application integration in the banking industry. Japan was the largest AI market in Asia-Pacific as well as globally in 2016, followed by China. Also, continued growth is expected in AI market in BFSI industry of North America and Europe. During the forecast period, the widening scope of AI technology across R&D sector within high-tech end-user industries is projected to increase this market in many developing nations, which are moving toward automation for gaining increased productivity, greater efficiency and higher industrial growth.
Some of the key players in the global AI market in BFSI are Google Inc., IBM Corp., Microsoft Corporation, General Vision Inc., Intel Corporation, Numenta Inc., Baidu, Inc., Inbenta Technologies, Inc. and NVIDIA Corporation.
GLOBAL AI MARKET IN BFSI SEGMENTATION