AI in Banking Market Size, Share, and Industry Analysis, By Deployment Model (On-premises and Cloud-based), By Function (Risk Management, Customer Service, Compliance & Regulatory, Wealth Management, and Others); By Technology (Chatbots/Virtual Assistants, Fraud Detection & Prevention, Customer Relationship Management, Process Automation, Predictive Analytics, and Others), and Regional Forecast, 2024-2032

Artificial Intelligence (AI) is propelling unprecedented changes across various sectors. One industry undergoing a profound AI-powered revolution is the field of banking. AI-based systems are helping banks enhance customer experience, manage risk, track market trends, perform predictive analytics, and automate repetitive processes. According to the “2023 Financial Services GenAI Survey” by Ernst & Young Global Limited, around 99% of the financial institution leaders surveyed said that their organizations were deploying AI. Nearly 87% of leaders stated that they believe AI can improve customer and client experience significantly. As per the “Banking on a Game-Changer – AI in Financial Services” report by Temenos, about 81% of IT leaders in the banking sector noted that unleashing value from AI will determine winners from losers. All these numbers suggest that the banking sector is swiftly moving toward AI to enhance service, efficiency, and productivity.   

The increased adoption of AI in the banking sector is majorly attributed to the growing importance of fraud detection & prevention, customer experience, risk management, and data-driven decision-making. Fraud cases in the banking sector are rapidly rising across the world. For instance, as per the Reserve Bank of India (RBI), the banking sector in India reported 14,483 frauds in the first half of FY24, compared to 5,396 cases in the same period a year ago. Fraud detection and prevention is one of the most critical competencies in banking today and is vital to the long-term health of a bank.

The COVID-19 pandemic accelerated the adoption of AI in banking to improve digital banking services, automate customer support, and detect fraud. However, economic uncertainties and changing customer behaviors led banks to prioritize cost-saving measures, impacting AI investment strategies and the pace of implementation in some cases.

Key Insights

The report covers the following key insights:

• Micro Macro Economic Indicators


• Drivers, Restraints, Trends, and Opportunities


• Business Strategies Adopted by the Key Players


• Consolidated SWOT Analysis of Key Players

Segmentation

Analysis By Technology

The AI in banking market is segmented into chatbots/virtual assistants, fraud detection & prevention, customer relationship management, process automation, predictive analytics, and others. The fraud detection & prevention segment dominates the market as due to increase in financial frauds worldwide. Fraud detection and prevention technology utilizes machine learning algorithms to analyze vast amounts of transaction data in real time, identifying patterns indicative of fraudulent activities. These systems can detect anomalies, flag suspicious transactions, and mitigate risks, enhancing security and protecting customers' assets.

Regional Analysis

The global AI in banking market is distributed into five regions: North America, South America, Europe, the Middle East & Africa, and Asia Pacific. North America commands the highest share in the market due to rapid technological advancements, rising fraud concerns, and stringent regulatory compliance. The banks in the region are early adopters of advanced technologies, resulting in a high demand for AI tools. AI-powered analytics provide banks with actionable insights from vast amounts of customer data, enabling data-driven decision-making, risk management, and product innovation.

The Asia Pacific region demonstrates the highest CAGR in the AI in banking market owing to its rapidly growing economies and robust digital transformation. Banks in this region are undergoing digital transformation to meet evolving customer expectations and adapt to changing market dynamics, driving investment in AI technologies for digital banking, chatbots, and virtual assistants.

Global Distribution of the AI in Banking Market, By Region

• North America – 32%


• South America – 7%


• Europe – 24%


• Middle East and Africa – 12%


• Asia Pacific – 25%

Key Players Covered

The report includes the profiles of key players such as IBM Corporation, Streebo Inc., Pandorabots, Infosys Limited, Experian, DICEUS, Wipro, and Kiya.ai.

Key Industry Developments

• November 2023: British bank NatWest Group unveiled a latest version of its chatbot that enables human-like conversations with customers. This virtual assistant, named Cora+ is powered by generative AI to offer more natural replied to customer queries.     


• September 2023: Intellect Global Transaction Banking (iGTB) unveiled iGTB Copilot, an AI solution for Commercial & Corporate Banking. iGTB Copilot combines Microsoft Azure OpenAI Service to enhance customer experiences and boost productivity for banks.