The Global AI in Fintech Market was valued at USD 7.8 Bn in 2020 and is expected to reach USD 34.1 Bn by 2027, with a growing CAGR of 23.5% during the forecast period.
The rapid digitization of the Banking, Financial Services, and Insurance (BFSI) sector across the globe is expected to drive the global AI in fintech market.
Artificial intelligence is improved by using a combination of methods derived from human intelligence, but still within human limits. The use of process automation in financial organizations is contributing to market growth, and artificial intelligence is performing increasingly complex automation. Due to the increasing penetration of the internet, fintech is one of the fastest-growing industries across the world. The number of users using mobile devices for related actions and transactions is growing exponentially. Due to this, artificial intelligence will continue to gain in popularity over the forecast period as a way to counter cyber-attacks from fraud. Increasing the use of AI-enabled technology solutions in the capital market is an opportunity for the AI in fintech market.
In addition, the growing demand for process automation among financial organizations is driving the market. One of the major drivers of artificial intelligence in financial institutions is process automation. It further evolves into cognitive process automation, in which AI systems can automate complex tasks such as it can be used to check the large information and consequently reduce the time in the process. Most fintech companies are faced with sensitive data privacy and security issues, which is the biggest challenge with AI. Since data breaches or security issues could have disastrous consequences for the fintech industry, strict adherence to compliance and governance regulations are in place. Data from vendors and consumers are fed into advanced algorithms powered by AI, which creates sensitive information that companies are unaware of, which is a cause for concern. It is particularly prevalent in retail banking, where the challenge of big data is facing consumers' data collection. The sensitive nature of data will prevent AI from being adopted, especially in the banking sector.
Based on deployment mode, the market has been segmented into cloud and on-premises. The on-premises segment dominated the AI in fintech market because it reduces the total cost of ownership. However, the cloud segment is going to witness significant growth in the AI in fintech market during the forecast period. The growth in the cloud deployment is attributed to the advantage such as high level of security as well as affordable in nature.
Global AI in Fintech Market by Region Outlook (Revenue, USD Million, 2021-2027)
In terms of geography, North America held the major market share in AI in fintech market in 2019. The growth in the region is attributed to the strong economy, high investment in research and development, and the presence of prominent players in the region. Moreover, rapid digitalization is one of the significant factors contributing to the growth of the AI in fintech market to a great extent. However, the Asia Pacific region is expected to grow at the highest CAGR during the forecast period owing to the faster adoption of digital payment and increasing penetration of internet services in the region. The supportive government initiatives provide ample opportunity for the growth of the AI in fintech market.
The Global AI in Fintech Industry Segmentation:
Global AI in Fintech Market by Type Industry Outlook (Revenue, USD Million, 2021-2027)
Global AI in Fintech Market by Application Industry Outlook (Revenue, USD Million, 2021-2027)
Global AI in Fintech Market by Deployment Mode Industry Outlook (Revenue, USD Million, 2021-2027)
The key players operating in the AI in fintech market are: