Global Generative AI In Financial Services Market Size, Share & Trends Analysis Report By Deployment (Cloud-based, and On-premises), By End User, By Application, By Regional Outlook and Forecast, 2024 - 2031

Global Generative AI In Financial Services Market Size, Share & Trends Analysis Report By Deployment (Cloud-based, and On-premises), By End User, By Application, By Regional Outlook and Forecast, 2024 - 2031

The Global Generative AI In Financial Services Market size is expected to reach $21.1 billion by 2031, rising at a market growth of 38.8% CAGR during the forecast period.

Many countries in the Asia Pacific are experiencing significant digital transformation in their financial sectors, with increased investment in AI technologies. This trend is evident in countries like China, India, and Singapore, where financial institutions leverage Generative AI to enhance services and improve operational efficiencies. Thus, the Asia Pacific region would acquire 26% of the total market share by 2031.

The major strategies followed by the market participants are Partnerships as the key developmental strategy to keep pace with the changing demands of end users. For instance, In May, 2024, Oracle Corporation announced a partnership with Accenture, a global consultancy firm, to develop generative AI solutions. Leveraging Oracle Cloud Infrastructure, the two companies aimed to improve efficiency, resilience, and customer experiences, focusing initially on digital finance transformation and expanding to other industries. Moreover, In August, 2024, Accenture PLC signed a partnership with S&P Global, a capital market company. The partnership aimed to drive generative AI innovation in financial services.

Market Growth Factors

The volume of data generated in the financial sector has surged dramatically due to digital transactions, customer interactions, and regulatory requirements. In addition, Generative AI technologies offer sophisticated analytical capabilities that can identify patterns, trends, and correlations within financial data that may not be apparent through traditional analytical methods. In conclusion, the rising demand for advanced analytics and insights drives the market's growth.

Modern consumers expect personalized financial services catering to their needs and preferences. They seek solutions that address their current financial situations and anticipate future requirements. With the insights generated by AI, financial institutions can rapidly innovate and customize their product offerings. Thus, increased focus on customer-centric financial solutions propels the market's growth.

Market Restraining Factors

The initial setup of Generative AI systems requires considerable financial investment. This includes the cost of acquiring advanced hardware, such as high-performance servers and GPUs, as well as specialized software and licenses. Integrating Generative AI solutions with existing financial systems and IT infrastructure can be complex and costly. Therefore, high implementation and operational costs are hampering the market's growth.

Deployment Outlook

On the basis of deployment, the market is segmented into on-premises and cloud-based. In 2023, the on-premises segment attained 28% revenue share in the market. Many financial institutions still prefer on-premises solutions for various reasons, particularly regarding data security and compliance.

End User Outlook

By end user, the market is divided into retail banking, corporate banking, insurance companies, investment firms, hedge funds, and FinTech Companies. The corporate banking segment procured 22% revenue share in the market in 2023. Corporate banks leverage Generative AI to manage complex transactions, assess credit risk, and enhance decision-making processes.

Application Outlook

Based on application, the market is divided into risk management, fraud detection, credit scoring, forecasting & reporting, and customer service & chatbots. The fraud detection segment attained 23% revenue share in the market in 2023. Financial institutions increasingly leverage Generative AI to analyze transaction patterns and identify anomalies, enhancing their real-time capabilities to detect fraudulent activities.

Regional Outlook

Region-wise, the market is analyzed across North America, Europe, Asia Pacific, and LAMEA. In 2023, the North America region witnessed 42% revenue share in the market. North America, particularly the United States, boasts a robust technological ecosystem with significant AI research and development investments.

Recent Strategies Deployed in the Market

• May-2024: SAP SE announced a partnership with IBM, an American technology company, to integrate generative AI into SAP’s cloud solutions, enhancing business processes and industry innovation. This partnership aimed to optimize business outcomes, accelerate cloud adoption, and develop over 100 AI solutions across various industries, leveraging SAP Business Technology Platform.
• May-2024: Accenture announced the acquisition of Parsionate, a data consultancy. This acquisition would strengthen Accenture’s ability to deliver innovative, data-driven solutions across various industries, leveraging Parsionate’s expertise in data strategy and technology implementation.
• Apr-2024: Intel Corporation partnered with Infosys, an Indian IT company, to accelerate AI adoption in enterprises. The partnership would enhance performance, cost-effectiveness, and responsible AI use.
• Apr-2024: Salesforce, Inc. released new capablities on Einstien AI platform. The new capabilities help banks manage transaction disputes efficiently. Features include Transaction Dispute Management and Einstein Copilot Banking Actions, which automate tasks, reduce errors, and improve customer communications, addressing the rise in digital payment disputes and enhancing service agent productivity.
• Apr-2024: Oracle Corporation signed a partnership with Palantir, an American software company, to provide secure cloud and AI solutions for businesses and governments. This partnership would maximize data value, improve efficiency, and meet sovereignty and security standards.

List of Key Companies Profiled

• Amazon Web Services, Inc.
• Google LLC
• IBM Corporation
• Intel Corporation
• Microsoft Corporation
• Salesforce, Inc.
• OpenAI, LLC
• SAP SE
• Oracle Corporation
• Accenture PLC

Global Generative AI In Financial Services Market Report Segmentation

By Deployment

• Cloud-based
• On-premises

By End User

• Retail Banking
• Corporate Banking
• Insurance Companies
• Investment Firms
• Hedge Funds
• FinTech Companies

By Application

• Risk Management
• Fraud Detection
• Credit Scoring
• Forecasting & Reporting
• Customer Service & Chatbots

By Geography

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• UK
• France
• Russia
• Spain
• Italy
• Rest of Europe
• Asia Pacific
• China
• Japan
• India
• South Korea
• Australia
• Malaysia
• Rest of Asia Pacific
• LAMEA
• Brazil
• Argentina
• UAE
• Saudi Arabia
• South Africa
• Nigeria
• Rest of LAMEA