The Artificial Intelligence (AI) in Banking market as valued at US$10.096 billion in 2019. Growing adoption of digitization across the global banking sector is significantly boosting the use of advanced technologies including artificial intelligence. Banks use computers with a detailed record of each and every transaction. Some of the various channels that banks use for their operations include mails, telephone banking, ATMs, and e-banking. As such, the sector is increasingly cooperating with artificial intelligence technology in its operations, thereby driving the market growth of artificial intelligence (AI) in banking worldwide. Artificial intelligence allows banks to examine the database effectively and efficiently while making it easier to recommend, forecast, and execute tailored financial advice to customers. Growing demand for real-time information about the stock market is another major driver of artificial intelligence (AI) in banking market. The increasing popularity of digital wallets is also boosting the adoption of artificial intelligence across the banking sector. People are nowadays shopping heavily on online stores and prefer to do cashless transactions using digital wallets. As such, the demand for artificial intelligence (AI) solutions across the banking sector for digital payments is also increasing which, in turn, is fuelling the artificial intelligence market growth.
Global banks are also showing interest in incorporating artificial intelligence in banking for applications including placing an AI robot for self-service at banks, smarter chatbots for customer service, and personalizing services for individuals. Moreover, artificial intelligence (AI) enables banks to reduce fraud and security risks while bringing more efficiency to their back-office. Banks such as Wells Fargo, JPMorgan, and CitiBank are using artificial intelligence (AI) for various applications, thus positively impacting the AI in banking market growth. Many banks are partnering up with fintech companies in order to rapidly adopt artificial intelligence technology. In July 2019, New York-based Kasisto collaborated with Manulife Bank and launched MAI, a conversational AI solution targeted towards Manulife’s Canadian millennial clients. Recently in March 2020, Scotiabank has partnered with MaRS, a support network for Canadian startups, and C100, a non-profit community for Canadians working in technology for opening ts own platform up to new technologies. Canada’s third-largest bank wants to increase its access to emerging technologies, especially artificial intelligence (AI).
However, factors such as lack of required infrastructure and skilled AI talent is still hindering the AI in the banking market to reach its full potential, especially in developing countries.
Artificial Intelligence (AI) in Banking market is segmented by offering, application, and geography. By offering, the global artificial intelligence (AI) in banking market is segmented into hardware, software, and services. By application, the market is segmented into conversational banking, anti-fraud and risk, and credit underwriting.
North America holds the largest market share throughout the forecast period
Geographically, the Artificial Intelligence (AI) in Banking market is segmented as North America, South America, Europe, Middle East, and Africa (MEA), and Asia Pacific (APAC). North America accounted for the major market share in 2019 and will remain at its position until the end of the forecast period. This dominance is majorly attributed to the early adoption of advanced technologies coupled with the presence of global market players in the region. Major banks in countries like the U.S. and Canada are have already adopted artificial intelligence solutions for various applications. For example, the USAA (the United Services Automobile Association) uses AI to monitor fraud and fraud prevention. The financial services company is using AI to look and analyze how its customers use the apps, where it is being used, and typical customer behaviors that they display while interacting with the apps so as to analyze patterns and detect any potential anomalies and frauds taking place. Furthermore, banks are launching new AI-powered solutions in order to serve better to their customers while collaborating with AI providers. In November 2019, Bank of Georgia launched a new retail banking solution, powered by artificial intelligence (AI). MBank, features smart personal finance management which helps users track their spending and categorize their finances, income, and expenses. Recently in March 2020, Visa has partnered with Michigan-based conversational AI company Clinc. Under this partnership, Clinc will serve the banks, credit unions, and financial institutions that use Visa’s application program interfaces (AQPIs) with voice-powered capabilities such as bill payments, fund transfers, and opening a new credit card. In July 2019, Toronto-based fintech, Sensibill, secured US$31.5 million in Series B funding to power AI banking solution for freelancers and small business owners.
APAC regional market will experience a decent CAGR during the forecast period owing to the increasing digitalization of the banking sector in APAC countries. Supportive government policies and initiatives to increase the adoption of artificial intelligence (AI) across various sectors, including banking, will further drive the market growth in this region. For example, China is following a three-step program outlining its plan to become a world leader in artificial intelligence (AI) by 2030. Similarly, the South Korean government also has an AI strategy to become a top 4 contender in artificial intelligence by 2022. Recently in January 2020, leading stock exchange NSE in India has launched a Knowledge Hub which is an artificial intelligence (AI)- powered learning ecosystem to assist the banking and financial services sector in enhancing the skills of their employees. Moreover, it will help academic institutions in preparing a skilled talent pool for the financial services industry.
Prominent key market players in the Artificial Intelligence (AI) in Banking market include Zest AI, IBM, DataRobot, Inc., Accenture, Personetics Technologies, Affectiva, and Kensho Technologies, LLCamong others. These companies hold a noteworthy share in the market on account of their good brand image and product offerings. Major players in the Artificial Intelligence (AI) in Banking market have been covered along with their relative competitive position and strategies. The report also mentions recent deals and investments of different market players over the last two years.