AI and Automation in Banking Market

AI and Automation in Banking Market Outlook (2022 to 2032)

The global AI and automation banking market was valued at USD 16.5 Bn in 2021. The trade is likely to reach USD 23.3 Bn in 2022. Due to improvements in data collection technology among financial institutions, the demand for AI and automation has surged significantly. The global AI and automation market is projected to reach USD 182 Bn, exhibiting a 22.8% CAGR during the forecast period.

Estimated Market Value in 2022	USD 23.3 Bn
Estimated Market Value in 2032	USD 182 Bn
Projected CAGR from 2022 to 2032	22.8%
Key Companies Profiled	Amazon Web Services Inc. Microsoft Corporation Google LLC Intel Corporation Oracle Corporation

Increasing investments by banks in AI and growing consumer preference for personalized financial services are projected to bolster the market growth in the forecast period. As per joint research conducted by the National Business Research Institute and Narrative Science, in 2020, nearly 32% of banks were dependent on AI technologies for voice recognition, predictive analytics, and other essential services to gain a competitive edge against their competitors.

Revenue Analysis of Global AI and Automation in Banking Market 2015to 2021 vs. Future Outlook 2022 to 2032

The global AI and automation banking industry is estimated at USD 16.5 Bn in 2021 and USD 23.3 Bn in 2022. The industry is expected to record a 42.1% CAGR from 2015 to 2021. An increase in market value can be attributed to the increasing demand for real-time information about the stock market.

Also, the outbreak of COVID-19 is projected to have a positive impact on the market due to the increased adoption of work from home culture across financial institutions. Moreover, rapid adoption of artificial intelligence and machine learning tools in the banking sector for carrying out essential jobs, globally.

The growing adoption of advanced applications in the financial sector has enhanced the scope of market expansion. The AI and automation in the banking sector are estimated at USD 182 Bn, experiencing a CAGR of 22.8% during the forecast period. The increasing popularity of digital wallets is projected to play an important role in bolstering the market in the forecast period.

What are the Growth Prospects in the Global AI and Automation in Banking Market?

Increasing Investments by Financial Institutions to Propel Growth Prospects in the Market

Major financial institutions like Bank of America, JPMorgan, and Morgan Stanley are making aggressive investments in AI technology to augment automated investment advisors. The aim is to bring expertise in identifying red flags like money laundering techniques, which can be monitored by the application of such advanced techniques, thereby, expanding the market growth in the assessment timeframe.

Also, with rising complications and competition in the banking sector, the demand for industry-specific solutions has increased considerably to cater to the accumulating needs. Therefore, in order to meet the growing requirements of consumers, various banks and FinTech are adopting AI solutions, which are expected to drive market growth in the future.

The increasing funding by eminent players is expected to further pump the market growth. For instance, in March 2022, Saphyre, a known FinTech organization, announced the accomplishment of its Series A round of USD 18.7 Million, led by HCAP Partners, with J.P Morgan and BNP Paribas are participating in the round.

How does Growing Preference for Personalized Financial Services Augment the Market Size?

Growing Adoption of Chatbots among Banks to Boost the AI Application in the Banking Sector

Banks are offering budget management apps powered by AI technology, which helps customers to obtain their financial targets and augment their money management process, thereby, developing the market expansion. Also, Robo-advisors are gaining significant traction in personalized financial services, as they majorly target investors with limited resources like SMEs and individuals.

In addition, AI-based Robo-advisors can implement the conventional method of data processing techniques to offer financial portfolios and solutions like investments, trading, and retirement plans for their consumers. Moreover, with surged usage-based loans AI technologies, advanced techniques are assisting in calculating the interests suitable for individuals, which is anticipated to augment the industry in the forecast period.

Country-Wise Analysis

How does Early Adoption of Technologies Result in Dominance of North America in the Global Market?

Presence of Developed Nations to Make Significant Contribution in Boosting the Regional Market

The analysis reveals that North America is expected to dominate the global AI and automation in banking market during the forecast period. The U.S is estimated at USD 64.6 Bn while recording a CAGR of 22.6% from 2022 to 2032. The development of the regional market can be attributed to the early adoption of modern technologies. The presence of established players’ networks in the country is projected to play a salient role in augmenting the trade.

For instance, the USAA (the United Services Automobile Association) implements AI to regulate fraud and fraud prevention. Further, banks are taking advanced solutions methods to offer better services to customers. For instance, in 2019, Bank of Georgia rolled out a new retail banking solution, powered by AI.

In another instance, in March 2020, Visa announced a partnership with Michigan-based conversational AI company Clinc. As per the partnership, Clinc will serve the credit unions, banks, and financial institutions that use Visa’s application program interface (AQPIs) with voice-powered capabilities like opening a new credit card, bill payments, and opening a new credit card.

How do Supportive Government Policies Favor the Expansion of APAC Market?

Rapidly Evolving Economies to Augment the Regional Market

APAC is projected to expand at the fastest CAGR during the forecast period. The presence of rapidly developing countries such as; China, Japan, and South Korea are set to play a vital role in bolstering the market in the region. Moreover, supportive government policies implemented are anticipated to fuel the market in the region. For instance, China is following a three-step program to become the world leader in AI by 2030.

In another instance, the South Korean government also intends on becoming the top 4 contenders in AI by 2022. In January 2020, NSE in India launched a Knowledge Hub which is an AI-powered learning ecosystem to aid the banking sector in augmenting the skills of their employees.

As per the analysis, China, Japan, and South Korea are estimated at USD 12.6 Bn, USD 10.2 Bn, and USD 6 Bn respectively. China is projected to grow at a CAGR of 22.2%, Japan at 21.1%, and South Korea at a 20.3% growth rate during the forecast period.

Category-Wise Analysis

What is the Contribution of Hardware Segment in Driving the Global AI and Automation in Banking Market?

Increasing Application of Microprocessors and Microchips to Support Segmental Growth

As per the analysis, the hardware segment is anticipated to record a CAGR of 22.6% during the forecast period. Expansion of the region can be attributed to the growing integration of AI hardware and accelerators like microprocessors and microchips to enhance the processing speed of AI-driven software in the banking sector.

How is Natural Language Processing Segment Contributing to Global AI and Automation in Banking Market?

Growing Deployment of Chatbots to Boost NLP Segment Expansion

The natural language processing segment is expected to garner significant market value in the forecast period. The segment is projected at a CAGR of 21.8% in the forecast period. The growing application of natural processing technology to improve customer service activities by implementing chatbots to address customers’ queries and understand their demands.

Competitive Landscape

The players of AI and Automation in Banking focus on expanding their global reach through strategies such as; collaborations, partnerships, and acquisitions. The players also make significant investments in R&D to innovate their products which will help in strengthening their positions in the global market. Key players in the region include Microsoft Corporation, Amazon Web Services Inc Google LLC, Oracle Corporation, and Intel Corporation among others.

• In July 2019, Toronto-based FinTech player, Sensibill, procured USD 31.5 Mn in Series B funding to power AI banking solutions for small business owners and freelancers.
• In March 2020, Scotiabank announced its partnership with MaRS, a support network for Canadian startups, and C100, a non-profit organization for Canadians working in technology opening its own platform up to new technologies. Canada’s third-largest bank aims to enhance its access to developing technologies, primarily in AI.

Key Segments Covered in the AI and Automation in Baking Industry Report

• By Component

  • AI and Automation in Banking Services
  • AI and Automation in Banking Hardware
  • AI and Automation in Banking Software

• By Technology

  • Deep Learning & Machine Learning AI and Automation in Banking
  • Natural Language Processing AI and Automation in Banking
  • Computer Vision AI and Automation in Banking
  • Others AI and Automation in Banking Technologies

• By Application

  • AI and Automation in Banking for Customer Service
  • AI and Automation in Banking for Back Office
  • AI and Automation in Banking for Financial Advisory
  • AI and Automation in Banking for Compliance and Security
  • AI and Automation in Banking for Risk Management
  • AI and Automation in Banking for Other Applications

• By Solution

  • AI and Automation in Banking Customer Service Analytics
  • AI and Automation in Banking Data Analytics & Visualization
  • AI and Automation in Banking Fraud Detection
  • AI and Automation in Banking Customer Relationship Management
  • Other AI and Automation in Banking Solutions

• By Region

  • North America
  • Europe
  • Asia-Pacific
  • Middle East & Africa
  • Latin America