How Has the Generative Artificial Intelligence AI In Banking And Finance Market Evolved Historically and What is its Current Size?
The generative artificial intelligence ai in banking and finance market has seen considerable growth due to a variety of factors.
• The market size of generative artificial intelligence (AI) in the banking and finance industry has seen a significant growth in the past few years. The market is predicted to surge from $1.3 billion in 2024 to $1.75 billion in 2025, reflecting a compound annual growth rate (CAGR) of 34.9%.
Factors like the digitization of financial services, the demand for superior customer experiences, the rising prominence of data analytics, the escalating needs for regulatory compliance, the essentiality of fraud detection and risk management, and the growing emphasis on operational efficiency and cost efficiency have contributed to this increase during the historical period.
What is the Forecasted Market Size and CAGR for the Generative Artificial Intelligence AI In Banking And Finance Market?
The generative artificial intelligence ai in banking and finance market is expected to maintain its strong growth trajectory in upcoming years.
• In the forthcoming years, substantial growth is anticipated for the generative artificial intelligence (AI) in the banking and finance market, with it set to exponentially grow to $5.74 billion by 2029, exhibiting a compound annual growth rate (CAGR) of 34.6%.
This growth surge in the forecast period can be traced back to factors like the rising demand for individualized financial services, incorporation of AI in current banking systems for efficient operations, the requirement for predictive analysis in risk assessment, the need for enhancement in client trust and transparency, urgency to tackle concerns about data privacy, rapid development of workforce skills to uphold AI projects, and the pressure to utilize advanced AI technologies for market dominance from competitors. Significant trends forecasted for the period include the amalgamation of generative AI in risk management and fraud detection systems, widening of AI proficiencies in algorithmic trading and investment tactics, betterment of regulatory compliance through automated reports, the emergence of AI-driven virtual assistants for customer interactions, the creation of sophisticated predictive analytics for market prediction, and the increased focus on ethical AI methodologies to guarantee fairness and transparency in AI operations.
What Key Factors and Trends Are Driving The Growth Generative Artificial Intelligence AI In Banking And Finance Market?
The growing emphasis on data security is predicted to accelerate the expansion of the generative artificial intelligence (AI) space in the banking and finance sectors. The term "data security" is used to describe the procedures undertaken to safeguard digital data from unauthorized interaction, corruption, or theft during its existence. This necessitates the execution of measures and mechanisms to maintain the confidentiality, integrity, and accessibility of the data. An increase in cyber threats, regulatory mandates, and the demand for more robust protection of sensitive data are the primary reasons for this growing emphasis on data security. Generative AI enhances data security in the banking and finance sectors by identifying irregular trends, foreseeing potential risks, and automating safety regulations for the effective protection of sensitive financial details. For instance, based on the 2021 Internet crime report by the Federal Bureau of Investigation, a US-based official law enforcement body, there were 51,829 victims of personal data leaks in 2021, as reported in March 2022. Similarly, the Federal Bureau of Investigation reported in March 2023 that the count of personal data breach victims reached 58,859. Hence, the escalating importance placed on data security is bolstering the growth of generative artificial intelligence (AI) in the banking and finance markets.
What Are The Market Segments In The Generative Artificial Intelligence AI In Banking And Finance Market?
The generative artificial intelligence (AI) in banking and finance market covered in this report is segmented –
1) By Technology: Natural Language Processing, Deep Learning, Reinforcement Learning, Generative Adversarial Networks, Computer Vision, Predictive Analytics
2) By Deployment Model: On-Premises, Cloud-Based
3) By Application: Fraud Detection, Customer Service, Risk Assessment, Compliance, Trading And Portfolio Management
4) By End-User: Banks, Insurance Companies, Investment Firms, Fintech Companies
Subsegments:
1) By Natural Language Processing (NLP): Chatbots and Virtual Assistants, Sentiment Analysis Tools, Document Processing and Automation, Speech Recognition Systems
2) By Deep Learning: Fraud Detection Systems, Credit Scoring Models, Risk Management Solutions, Algorithmic Trading Strategies
3) By Reinforcement Learning: Portfolio Management, Automated Trading Systems, Adaptive Risk Management, Customer Behavior Analysis
4) By Generative Adversarial Networks (GANs): Synthetic Data Generation, Anomaly Detection, market Simulation Models, Enhanced Image and Video Analysis
5) By Computer Vision: Identity Verification Solutions, Check and Document Scanning, Image Recognition for Security, Automated Surveillance Systems
6) By Predictive Analytics: Customer Lifetime Value Prediction, market Trend Analysis, Loan Default Prediction, Personalized marketing Strategies
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How Are New Trends Impacting The Size Of The Generative Artificial Intelligence AI In Banking And Finance Market?
In the banking and finance industry, leading companies are prioritizing advanced technologies like cloud-based artificial intelligence (AI) platforms in their operations in the generative artificial intelligence (AI) field. They find these technologies instrumental in improving operational effectiveness, automating intricate financial processes, optimizing customer service with tailored interactions, and providing superior analytics for improved decision-making and risk assessment. Cloud-based AI platforms are combined cloud services that offer AI functionalities via internet platforms. They enable entities and developers to establish, implement, and maintain AI models and apps without the requirement to invest in or uphold physical hardware or handle intricate infrastructure. As an illustration, Ally Financial Inc., an American financial services company, introduced Ally.ai in September 2023. This proprietary, cloud-based AI platform is devised to enrich the firm's financial services using advanced machine-learning algorithms and natural language processing. The platform strives to augment customer communications by offering personalized financial guidance, automating regular tasks, and delivering predictive analytics to enhance financial decision-making and operational effectiveness.
Who Are the Key Players In The Generative Artificial Intelligence AI In Banking And Finance Market?
Major companies operating in the generative artificial intelligence (AI) in banking and finance market are:
• Microsoft Corporation
• Wells Fargo & Co
• Amazon Web Services Inc.
• HSBC Holdings plc
• International Business Machines Corporation
• American Express
• Morgan Stanley & Co LLC
• Goldman Sachs Group Inc.
• ING Group
• Oracle Corporation
• SAP SE
• Nvidia Corporation
• Salesforce Inc.
• NatWest Group plc.
• Lloyds Banking Group
• Oversea-Chinese Banking
• SAS Institute Inc.
• SymphonyAI LLC
• DataRobot Inc.
• Rasa Technologies Inc.
What Are The Regional Insights Into The Generative Artificial Intelligence AI In Banking And Finance Market?
North America was the largest region in the generative artificial intelligence (AI) in banking and finance market in 2024.Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the generative artificial intelligence (AI) in banking and finance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
