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The artificial intelligence (AI) market share in the BFSI sector is expected to increase by USD 32.97 billion from 2021 to 2026, and the market’s growth momentum will accelerate at a CAGR of 36.68%.
This artificial intelligence market in BFSI sector research report provides valuable insights on the post-COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers artificial intelligence (AI) market segmentation in the BFSI sector by end-user (banking, investment and securities management, and insurance) and geography (North America, APAC, Europe, the Middle East and Africa, and South America). The AI market in the BFSI sector report also offers information on several market vendors, including Alphabet Inc., Amazon.com Inc., Amelia US LLC, Baidu Inc, Glia Technologies Inc, Inbenta Technologies Inc., Intel Corp., International Business Machines Corp., Lexalytics Inc., Microsoft Corp., NVIDIA Corp., Oracle Corp., Palantir Technologies Inc., Salesforce Inc., ServiceNow Inc., Verint Systems Inc, ZestFinance Inc, and SAP SE among others.
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The enhanced operational efficiency with ai is notably driving the artificial intelligence (AI) market growth in the BFSI sector, although factors such as the need for high data quality may impede the market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the artificial intelligence (AI) industry in BFSI sector. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
Key Artificial Intelligence (AI) Market Driver in BFSI Sector
One of the key factors driving growth in the artificial intelligence (AI) market in the BFSI sector is the enhanced operational efficiency of AI. The banking and financial services industries are adopting AI-based solutions to improve their operational efficiency and improve customer experience. Increasing customer expectations in terms of improved service delivery are driving traditional banks and financial institutions to adopt advanced technologies such as AI and big data. The traditional approaches of banks and insurance firms will not be sustainable going forward owing to the huge volumes and variety of data being generated. Hence, BFSI companies are focusing on implementing AI solutions and data analytics to achieve better insights from the data collected. During the forecast period, the adoption of AI is expected to penetrate other sub-segments such as sales and distribution, fraud detection, portfolio investigation, and threat prediction to execute internal operations more efficiently while reducing cost and increasing ROI. All these factors are expected to fuel the growth of the focused market.
Key Artificial Intelligence (AI) Market Trend in BFSI Sector
The rise in cloud-based solutions is an artificial intelligence (AI) market in the BFSI sector trend that is expected to have a positive impact in the coming years. AI consists of machine learning, deep learning, and neural network technologies that help in developing cloud-based AI software and services, such as natural language processing and computer vision, and the ability to handle huge data for demand forecasting. Increased availability of mobile devices like smartphones and new technologies, such as machine learning algorithms and cloud computing, is expanding the use of AI in the financial sector. To adopt AI technologies in the on-premises data center, companies would require high computing and storage capabilities to process the data quickly. This results in increased capital expenditure. Cloud-based software and platforms help companies in overcoming the cost barriers and drive AI adoption in SMEs and startups. Cloud offerings made banks more agile instead of upgrading their infrastructure. The implementation of cloud-based AI services is more feasible and cost-effective for BFSI companies, especially SMEs and startups. Cloud-based core banking is expected to be the most prominent trend.
Key Artificial Intelligence (AI) Market Challenge in BFSI Sector
The need for high data quality will be a major challenge for the artificial intelligence (AI) market in the BFSI sector during the forecast period. The BFSI sector generates and stores more sensitive data when compared to other industries. AI-based solutions leverage high volumes of data to derive insights to assist businesses in their activities. Hence, AI systems need to utilize high-quality data that support algorithms to derive insights. The increasing frequency of data breaches is witnessing the implementation of strict regulations to protect users with data privacy. GDPR, PSD2, MiFID II, and Financial Crimes Enforcement Network (FinCEN) are the major government bodies to which financial institutions are currently adhering to ensure compliance with improved data governance. Biased decisions derived from AI systems may impact the decision-making process of banking and financial service firms in suggesting recommendations and offering personalized services to their customers. Hence, the lack of quality data will be a deterrent to market growth.
This artificial intelligence (AI) market in the BFSI sector analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.
Technavio categorizes the global artificial intelligence market in BFSI sector as a part of the global application software market within the global IT software market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the artificial intelligence (AI) market in BFSI sector during the forecast period.
The report analyzes the market’s competitive landscape and offers information on several market vendors, including:
This statistical study of the artificial intelligence (AI) market in BFSI sector encompasses successful business strategies deployed by the key vendors. The artificial intelligence market in BFSI sector is fragmented and the vendors are deploying organic and inorganic growth strategies to compete in the market.
To make the most of the opportunities and recover from the post-COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The artificial intelligence (AI) market in BFSI sector forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Our report provides extensive information on the value chain analysis for the artificial intelligence market in BFSI sector, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
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48% of the market’s growth will originate from North America during the forecast period. US and Canada are the key markets for artificial intelligence (AI) in the BFSI sector in North America. Market growth in this region will be faster than the growth of the market in the European regions.
The early adoption and increasing investments in AI technologies by players such as IBM, Google, Microsoft, and AWS in the region will facilitate the artificial intelligence (AI) market growth in BFSI sector in North America over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
In 2020, the COVID-19 pandemic had a favorable influence on the AI market in the BFSI sector in North America. Owing to the pandemic, governments in nations, including the US, Canada, and Mexico, imposed lockdowns in 2020, which forced people to stay at home to prevent the spread of the disease. As a result, sectors, including BFSI, were forced to undertake numerous activities online, leading to the widespread use of virtual private networks (VPNs) for remote work and teleconferencing in North America. Moreover, the initiation of large-scale vaccination drives, the lifting of lockdown restrictions in different countries in the region, and the increased funding toward the development of data centers have further fueled the demand for AI across the BFSI sector, which, in turn, will propel the growth of the regional market during the forecast period.
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The artificial intelligence (AI) market share growth in the BFSI sector by the banking segment will be significant during the forecast period. The use of cognitive technology, along with AI, helps banks to leverage digitalization and sustain competition with FinTech players. AI technologies are revolutionizing banking processes and the relationship between banks and customers. AI is expected to shape the future of the banking sector as it provides the power of advanced data analytics to fight against fraudulent transactions and improve compliance, all within seconds.
This report provides an accurate prediction of the contribution of all the segments to the growth of the artificial intelligence (AI) market size in BFSI sector and actionable market insights on the post-COVID-19 impact on each segment.
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Artificial Intelligence (AI) Market Scope in BFSI Sector |
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Report Coverage |
Details |
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Page number |
120 |
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Base year |
2021 |
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Forecast period |
2022-2026 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 36.68% |
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Market growth 2022-2026 |
$32.97 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
33.99 |
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Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
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Performing market contribution |
North America at 48% |
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Key consumer countries |
US, Canada, China, Japan, and UK |
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Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
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Key companies profiled |
Alphabet Inc., Amazon.com Inc., Amelia US LLC, Baidu Inc, Glia Technologies Inc, Inbenta Technologies Inc., Intel Corp., International Business Machines Corp., Lexalytics Inc., Microsoft Corp., NVIDIA Corp., Oracle Corp., Palantir Technologies Inc., Salesforce Inc., ServiceNow Inc., Verint Systems Inc, ZestFinance Inc, and SAP SE |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Five Forces Analysis
5 Market Segmentation by End-user
6 Customer Landscape
7 Geographic Landscape
8 Drivers, Challenges, and Trends
9 Vendor Landscape
10 Vendor Analysis
11 Appendix
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