Rising demand for data-driven solutions, increasing digital banking trends, fast-changing regulatory & compliance laws, fraud detection, and enhancing customer experience are expected to drive the market growth. The AI technologies such as Machine Learning, Deep Learning, Natural Language Processing, Image and video processing are expected to boost the AI implementation in the BFSI industry.
Infoholic Research LLP, a global market research, and consulting company, has published a study titled “Artificial Intelligence and Cognitive Systems in BFSI: Global Drivers, Opportunities, Trends, and Forecasts, 2016–2022” (May 2017).
According to Infoholic Research, AI and Cognitive Systems technologies has a wide range of benefits in the BFSI industry. The technologies help in bringing a higher level of automation in the industries and benefits companies to strengthen their business strategies, customer relationship, new customer group recognition, fraud prevention, dealing with risk & compliance laws, etc. The changing dynamics of banking, insurance, and financial industries in terms of technology adoption is fueling the innovations. The market is expected to grow at a CAGR of 45.9% during the forecast period 2016–2022.
The AI and Cognitive technologies market is segmented into two deployment types, namely on-premises and cloud. Most of the AI technologies are delivered on the on-premises mode, owing to their technical, processing, and security advantages over cloud-based platforms whose penetration is more among the small and medium-sized enterprises, and this trend is expected to increase owing to the cost-effectiveness and versatility. Currently, on-premises segment is dominating the market with a share of 82.0%, which is expected to lose its share to cloud-based platforms by 2022.
Most of the technology providers operating in the market have services based on machine learning, deep learning, image and video processing, natural language processing, and others. Machine learning and deep learning are popular for pattern recognition in financial services & insurance; natural language processing is popular as virtual customer agents; image and video processing is widely used for cheques & document processing, knowledge management, advisory, and several other aspects.
The Americas is the leading region in terms of receiving AI services, followed by Europe and APAC. The Americas is known for its hundreds of AI technology developers who are driving the global artificial intelligence ecosystem. In APAC, China, Japan, India, South Korea, and Singapore are expected to support the market growth.
Insurance and financial services are the primary receivers of these technologies, and banking industry would record a lower adoption rate owing to the technological difficulties, however Banking industry represents the higher market share due to the wider uses of AI technologies and increasing usage from the existing customers through the forecast period. The banking industry market share is expected to reach $46.22% by 2022.