Artificial Intelligence (AI) In Banking Market - Forecasts from 2024 to 2029
Artificial intelligence (AI) in the banking market is estimated to grow at a CAGR of 55.53% to attain US$54.635 billion in 2029, increasing from US$17.383 billion in 2024.
In the banking sector, AI or artificial intelligence is set to play a critical role. In this sector, AI-based tools offer multiple benefits, which include personalizing customer service and experience. They can also automate various processes and systems, enriching the customer service experience. AI-based tools can also help detect fraud and other illegal activities, like money laundering.
The increasing adaptation of advanced technologies, such as AI-based accounting software, has increased the demand for hassle-free online and mobile banking services.
By integrating AI with banks through investment in coherent technology, banks can gain digital benefits and compete with FinTech companies.
Further, the AI algorithm performs money-laundering prevention activities in seconds. Otherwise, it will take hours to days. In addition, AI has become an integral part of people's lives in the modern era of development. Banks have begun integrating AI-based technology with their existing technology to meet end-user demand. Major developments in the market are due to enhancing customer benefits, increasing risk management, and following regulatory compliance. Sensitive information security issues can hinder market expansion, making the deployment of data security with AI integration in the banking sector crucial.
Artificial Intelligence (AI) in banking market drivers
Increasing customer experienceConsumers demand convenience and a user-friendly experience. ATMs are a huge success because of their ease of access. Customers can withdraw money at their own convenience. This led to the innovation of bringing AI into the banking sector to enhance this experience so customers can access all the advanced services from the ease of their homes. It also streamlined the bank's workflow by assisting its consumers with banking-related difficulties.
For instance, in April 2024, Salesforce presented AI-powered capabilities built on the Einstein 1 Platform to help banks in dealing with transaction disputes more productively. These capabilities, including Transaction Dispute Management and Einstein Copilot Banking Actions, combine transaction information from banking stages with client information from Salesforce, computerizing manual errands, decreasing errors, and progressing client communications. The AI-powered handle streamlines the dispute process, whereas Einstein Copilot Banking Actions computerizes errands like updating client details and personalization communication via email.
Additionally, with AI, banks can manage large amounts of data at record speed and drive valuable insights from them. Features such as AI bots, digital payment advisors, and biometric fraud detection mechanisms enable a higher quality of service across a large customer base. All of this leads to higher revenue, lower costs, and high profits. Chabots are one of the best examples of AI in the banking industry. Once the bots are positioned, they can work 24*7, unlike humans, who have fixed timings to work on.
Artificial Intelligence (AI) in the banking market geographical outlook
North America is forecasted to hold a major share of the Artificial Intelligence (AI) in the banking market.North America is anticipated to grow due to the rising utilization of rapidly evolving digital technologies such as data analytics, AI, blockchain, IoT, cloud computing, and all Internet-based services in the region.
This region is also expected to dominate the global AI in the banking industry. According to the latest report from the United Nations Conference on Trade and Development, IoT devices with cellular connections are expected to grow from 320.6 million IoT connections in 2024 to account for 573.5 million IoT connections by 2029 in North America. This will increase the requirement to provide consumers with AI in Bank services, propelling the market expansion in the coming years.
Moreover, the regional market is expected to witness growth due to the increasing digitization of the banking sector. In addition, government policies and initiatives to promote the adoption of AI in various sectors, including banks, and the adoption of innovative technologies in developing countries such as the United States and Canada are expected during the forecast period.
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Report Coverage:Historical data & forecasts from 2022 to 2029
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The Artificial Intelligence (AI) in the banking market is analyzed into the following segments:By SolutionHardware
Software
Services
By ApplicationCustomer Service
Robot Advice
General purpose/Predictive Analysis
Cyber Security
Direct Learning
By GeographyNorth America
USA
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
Germany
France
United Kingdom
Italy
Spain
Others
Middle East and Africa
Saudi Arabia
UAE
Israel
Others
Asia Pacific
China
Japan
South Korea
India
Thailand
Taiwan
Indonesia
Others