AI in Banking Global Market Report 2024

The AI in banking market size has grown exponentially in recent years. It will grow from $9 billion in 2023 to $11.93 billion in 2024 at a compound annual growth rate (CAGR) of 32.5%. The growth observed in the historical period can be attributed to the proliferation of data in banking, the focus on fraud detection and prevention, efforts in enhancing customer service, cost reduction through automation, and the influence of competitive pressures in the industry.

The AI in banking market size is expected to see exponential growth in the next few years. It will grow to $37.15 billion in 2028 at a compound annual growth rate (CAGR) of 32.8%. The anticipated growth in the forecast period can be attributed to the expansion of AI in credit scoring, the implementation of chatbots for multichannel support, AI-driven wealth management solutions, open banking initiatives, and the use of explainable AI for transparency in decision-making processes. Major trends expected in the forecast period include the adoption of voice and chatbot interfaces for customer interaction, the use of predictive analytics for personalized banking services, regulatory compliance through AI solutions, blockchain integration for enhanced security and transparency, and the rise of robo-advisors in wealth management.

The surge in the popularity of mobile banking services is anticipated to significantly fuel the expansion of the AI in banking market in the coming years. Mobile banking, a service provided by financial institutions, empowers customers to conduct financial transactions remotely via smartphones or tablets. Accessing financial accounts and executing transactions at any time and from any location is made possible through mobile devices and dedicated banking applications. The escalating demand for mobile banking services is a driving force behind the integration of AI in banking operations, a trend projected to persist. Notably, data from March 2021, sourced from ACI Worldwide Inc., a US-based payment systems company, revealed a remarkable increase in mobile wallet transactions - from 102.7 billion in 2020 to a projected 2,582.8 billion by 2025. This burgeoning demand for mobile banking services stands as a key driver propelling the continued growth of the AI in banking market.

The surge in banks' investments in AI is anticipated to drive the expansion of AI within the banking sector. This strategic allocation of financial resources involves deploying artificial intelligence technologies, including machine learning, data analytics, and automation, aimed at optimizing operational efficiency, elevating customer service standards, and refining decision-making processes. The integration of AI in banking offers manifold benefits, from enhancing customer service through chatbots and task automation to bolstering fraud detection, investment optimization, and predictive market trend analysis. Consequently, this leads to heightened operational efficiency and superior risk management. For example, as per the International Trade Administration in March 2023, the United Kingdom's AI market is poised to reach $9.87 billion in 2023, demonstrating an impressive annual growth rate (CAGR) of 21.3%. The UK's AI market, currently valued at over $21 billion, is projected to soar to surpass $1 trillion by 2035, positioning it as the world's third-largest AI market, trailing only behind the U.S. and China. The UK stands out for its robust AI strategy, backed by substantial government funding, extensive research initiatives, significant venture capital investments in AI startups, and widespread adoption of AI within enterprises. As a result, the escalating investments by banks in AI technologies are a key driving force propelling the growth of AI within the banking sector.

Technological advancements represent a prominent trend gaining traction within the AI in banking market. Companies within this sector are embracing new technologies as a means to maintain their competitive edge. For example, in April 2023, Jordan Ahli Bank, a financial services entity based in Jordan, introduced ahilGPT, an AI system technology. This innovative solution enables customers to efficiently and accurately address inquiries or concerns related to banking and financial services. Through ahilGPT, both bank customers and staff can save considerable time and effort by swiftly obtaining precise responses.

Prominent players within the AI banking market are spearheading the development of cutting-edge products leveraging advanced technologies such as machine learning. Machine learning, a subset of artificial intelligence, employs algorithms to autonomously glean insights and identify patterns from data, enabling software to continuously enhance its performance. A prime illustration of this was witnessed in December 2022 when Nasdaq, a leading US-based stock exchange company, collaborated with Trackinsight, a financial technology firm based in France, to unveil Fundinsight. This groundbreaking solution caters to financial advisors, offering a complimentary online platform geared towards optimizing fund discovery, research, and portfolio management. Fundinsight empowers financial advisors to effectively compare over 38,000 ETFs and mutual funds, thereby enhancing their services and capabilities.

In January 2023, McKinsey & Company, a prominent US-based management consulting firm, finalized the acquisition of Iguazio for an undisclosed sum. This acquisition is poised to accelerate and expand AI implementations significantly, enabling McKinsey to deliver heightened impact for its clients. With the integration of Iguazio's technology and a team comprising over 70 data and AI professionals, McKinsey aims to enhance its capabilities in this domain. Iguazio, an Israel-based MLOps Platform, specializes in offering real-time and archived data encompassing NoSQL, SQL, time series, and file formats, providing swift, secure, and collaborative access to such data repositories.

Major companies operating in the AI in banking market report are Google LLC, Intel Corporation, Hewlett Packard Enterprise Development LP, Accenture PLC, International Business Machines Corporation., Cisco Systems Inc., Oracle Corporation, SAP SE, Asea Brown Boveri Ltd., Infosys Limited, BSH Hausgeräte GmbH, Ally Financial Inc., Fair Isaac Corporation, Harman International Industries, SAS Institute Inc., International Business Machines Corporation, IPsoft Inc., Nuance Communications, Inc., HighRadius Corporation, Vectra AI, Inc., Amazon Web Services Inc., Kreditech Holding SSL GmbH, Kensho Technologies, Inc., Hanson Robotics Limited, RapidMiner Inc., Blue Frog Robotics, BigML Inc., FANUC Corporation , Lingxi Technology Co., Ltd.

Asia-Pacific was the largest region in the AI in banking market in 2023. Asia-Pacific is expected to be the fastest-growing region in the global AI in banking market report during the forecast period. The regions covered in the AI in banking market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the AI in banking market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

AI's primary components within the banking sector encompass both solutions and services. Solutions involve the interconnection of bank branches, granting users access to diverse financial services and the ability to manage accounts globally, eliminating the need for physical branch visits. These technologies encompass machine learning, deep learning, natural language processing (NLP), computer vision, and other applicable tools tailored for small to medium-sized banks as well as large international institutions. AI's application in banking extends to risk management compliance, security protocols, customer service enhancements, back-office operations optimization, financial advisory services, and various other relevant applications.

The AI in banking software market research report is one of a series of new reports that provides AI in banking software market statistics, including AI in banking software industry global market size, regional shares, competitors with a AI in banking software market share, detailed AI in banking software market segments, market trends and opportunities, and any further data you may need to thrive in the AI in banking software industry. This AI in banking software market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The AI in banking market includes revenues earned by entities by maintaining tabs on consumer behavior, keeping track of transactions, and auditing and logging data to different compliance and regulatory systems. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included. The AI in banking market consists of sales of AI chatbots, facial recognition banking apps, and systems and software for fraud detection. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.