Market Research Report
AI in Fintech Market - Growth, Trends and Forecast (2019 - 2024)
|Published by||Mordor Intelligence LLP||Product code||649722|
|Published||Content info||130 Pages
Delivery time: 2-3 business days
|AI in Fintech Market - Growth, Trends and Forecast (2019 - 2024)|
|Published: June 1, 2019||Content info: 130 Pages||
AI in fintech market was valued at USD 6.84 billion in 2019 and is expected to reach USD 26.92 billion by 2024 registering a CAGR of 31.5% during the forecast period (2019 - 2024). Financial firms have been the early adopters of the mainframe computer, relational databases, and have eagerly awaited for the next level of computational power. Artificial Intelligence (AI) improves results by applying methods derived from aspects of Human Intelligence at a beyond human scale. The computational arms race for past years has revolutionized the Fintech companies. AI and machine learning have benefited the banks and fintechs as they can process huge amounts of information about customers. This data and information are then compared to obtain results about suitable services/products that customers want, which has aided, essentially, in developing customer relations. Owing to these benefits offered by the AI technology, fintech companies are increasingly demanding the AI-based solutions. Moreover, the fintech industry is witnessing a considerable increase in the number of startups. These players are also highly attracted toward the adoption of AI to automate and expand their businesses.
Artificial intelligence is a part of computer science, aiming to enable the development of computers, which can perform jobs usually done by people. Its main focus remains thinking or intelligence.
The development of AI systems tends to fall inside three main areas; building systems that think like people, creating computation models that get tasks done, and forming systems to inform and inspire, but not imitate. Fintech prioritizes financial inclusivity, and to achieve this, real-time play an important role in fintech's ease of adoption as individuals with a smartphone gain access to quick, personalized, and customized financial services.
Fraud prevention and detection represent the most significant area of concern, for the financial institutions. This segment is likely to become one of the prominent drivers of IT expenditure. Thus, AI capable of avoiding these frauds is expected to experience increased adoption in Fintechs. Fraudulent activities in the industry have evolved, over the decades. Earlier, frauds were limited to cheque frauds and wire frauds. However, with the growth of the cybersphere and the accompanying expansion of the cybercriminal realm, fraud has taken on more virtualized forms.
Owing to rising technological penetration and digital channels (such as internet banking and mobile banking) becoming the prominent choices of customers for banking services, there is a greater need for banks to leverage fraud prevention solutions.
North America is regarded as the most competitive and rapidly developing AI technology market, in the finance industry. North America, among all the regions, has registered the maximum adoption of AI in Fintech solutions, due to its early implementation in a majority of application areas.
The presence of financial service firms in the region is quite high. From 2011, until the third quarter of 2017, more than 3,330 new technology-based firms serving the financial services industry have been founded, around 40% of which are focused on banking and capital markets, as reported by the Treasury Department. These firms are grappling with unprecedented opportunities and challenges in digital finance, due to changing customer expectations, emerging new technologies, and fluctuating regulations.
AI in Fintech is a consolidated market due to the presence of many dominant players in the market. In terms of market share, few of the major players dominate the market. Various acquisitions and collaboration of large companies are expected to take place shortly which focuses on innovation.
For instance, In September 2017 MIT and IBM joined arms to invest in the artificial intelligence platform of the latter, Watson and unleash & enrich the application of it in diverse industries including fintech. This is likely to boost the company's presence and help the organization to be at par with its counterparts.