Pune, Dec. 7, 2024 (Globe Newswire) — Artificial Intelligence in Fintech Market Size Analysis:
“Artificial intelligence (AI) in the fintech market was valued at USD 12.2 billion in 2023 and will grow to USD 61.6 billion by 2032, expanding at a compound annual growth rate (CAGR) of 19.72%, according to a SNS Insider report. ” during the forecast period 2024-2032. ”
The growing demand for artificial intelligence (AI) in the fintech space is being driven by financial institutions and fintech companies looking to improve the efficiency, accuracy, and customer experience of their services. AI-driven technologies such as machine learning algorithms for fraud detection and AI-based chatbots for customer support are reshaping traditional financial models and driving major changes within industries. AI’s ability to process large amounts of data enables more accurate risk assessments, predictions, and personalized services, increasing both customer satisfaction and operational efficiency. This gives early adopters a competitive advantage in a rapidly evolving market. AI also plays a key role in strengthening cybersecurity across the financial system. AI is critical to identifying and preventing fraud by detecting patterns and anomalies in real time. Additionally, AI-powered chatbots streamline customer service operations and empower users to resolve issues anytime, anywhere, improving both efficiency and user experience. As more financial institutions integrate AI technology, the market will see significant growth, supported by government initiatives promoting digitalization and financial inclusion, further driving the adoption of AI in fintech.
A key catalyst for the role of AI in fintech is its impact on financial inclusion. AI and machine learning allow financial institutions to use alternative data to assess creditworthiness, making loans accessible to individuals without traditional credit history. This promotes financial inclusion by enabling underserved populations to access essential services such as loans, insurance and credit. AI has also revolutionized wealth management with the rise of robo-advisers, providing personalized investment advice at a fraction of the cost of traditional advisors and making wealth management services more accessible. The shift to automated financial advisory services is expected to significantly increase the demand for AI in fintech.
Additionally, AI’s ability to improve decision-making and operational efficiency in the fintech space is driving its adoption. Financial institutions leverage AI to automate processes, minimize human error, and enhance data analytics capabilities to deliver better financial predictions and insights. As the amount of data increases, the role of AI in analyzing and extracting valuable insights will further accelerate the market growth.
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The analysis of the major companies mentioned in this report is as follows:
Upstart – AI-powered loan origination platform Ant Group – Ant Financial’s credit scoring system Zest AI – AI-based credit underwriting software Cognitivescale – AI-powered financial services platform Kiva – AI-powered microlending platform PayPal – AI-based Mastercard’s fraud detection system – AI-powered fraud prevention solution Credit Karma – AI-powered credit scoring and financial advice tool Stripe – AI-powered payment processing and fraud detection Square – AI Based payments and POS solution SoFi – AI-powered personal finance and investment platform LenddoEFL – AI-based credit scoring system using alternative data Betterment – AI-powered robo-advisor platform Wealthfront – Automated AI-powered investment management Kabbage – AI-Powered Small Business Lending Platform Onfido – AI – Based Identity Verification and Fraud Detection IBM – Watson for Financial ServicesNuance Communications – Voice Biometrics Powered by AI Clarity Money – AI Based personal finance management app Finbox – AI-powered data-driven financial analysis platform
Artificial Intelligence in FinTech Market Report Scope:
Report Attribute Details Market size in 2023 USD 12.2 billion Market size to 2032 USD 61.6 million 2024-2032 Base year 19.72% CAGRCAGR2023 Forecast period 2024-2032 Historical data 2020-2022 Key regional scope North America (US, Canada, Mexico), Europe (Eastern Europe) (Poland, Romania, Hungary, Turkey, Rest of Eastern Europe) Western Europe (Germany, France, United Kingdom, Italy, Spain, Netherlands, Switzerland, Austria, Rest of Western Europe)). Asia Pacific (China, India, Japan, South Korea, Vietnam, Singapore, Australia, Rest of Asia Pacific), Middle East & Africa (Middle East (UAE, Egypt, Saudi Arabia, Qatar, Rest of Middle East), Africa (Nigeria), South Africa, Africa Rest of America), Latin America (Brazil, Argentina, Colombia, Rest of Latin America) Key Growth Drivers Analyze trades in real-time and enhance security
•Pandemic and customer preference for online solutions accelerated the transition to digital financial services.
• Employ machine learning to analyze alternative data sources for accurate credit scoring and default reduction.
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segmentation analysis
By deployment
In 2023, on-premises accounted for the largest revenue share of over 57.00%. On-premises deployment helps businesses install software and services on financial institution facilities/systems. The cloud segment is expected to grow at the highest CAGR during 2024-2032. Cloud-based AI algorithms help drive this growth by learning from past data, identifying current patterns, and providing recommendations. Cloud and AI have the potential to improve productivity, effectiveness, and digital security when it comes to data processing and reliability, and this automated process eradicates errors made by humans during data processing. In 2023, many fintech companies have advanced with the help of artificial intelligence in the financial services sector. For example, UnionBank in the Philippines used an AI-based credit scoring model to provide financial services to the unbanked using alternative data sources to create credit scores. Through this initiative, underserved communities were able to secure credit that they could not access through the traditional banking system.
The AI is hosted in the cloud and learns from the past, provides guidance, and evaluates current trends in AI. For example, US Bank renewed its partnership with Microsoft in 2023 to accelerate its banking transformation on Microsoft Azure. The partnership is focused on accelerating innovation in digital banking, as well as scaling new products faster and enhancing the experience across the bank’s customer journey. U.S. Bank also integrated cloud technology to automate core engineering, security, and risk management processes, reducing time to deploy new services. This will also help banks improve their data analysis and customer responsiveness capabilities to make informed decisions. This is in line with emerging digital banking trends that enhance agility, personalized and secure financial services experiences.
Artificial Intelligence in Fintech Market Segmentation:
By component
By deployment
By use
Virtual Assistant (Chatbot)Business Analytics and ReportingCustomer Behavior AnalysisFraud DetectionQuantitative and Asset ManagementOther
regional analysis
North America dominated the market in 2023, accounting for over 38.90% revenue share of global revenue. This high share reflects the importance of the developed countries of the United States and Canada for R&D-derived inventions. These are among the most competitive and rapidly developing regions in the world when it comes to fintech AI technologies. This is also backed by a number of startups and start-ups that provide AI solutions to the financial industry.
Asia Pacific is expected to grow at the fastest CAGR from 2024 to 2032. This upward trend can be linked to the rapid transition to digital payments and the result of the upward trend in internet services in the region. With the improvement in technology in APAC, the region is emerging as a potential market. In addition, the rapid growth of domestic companies and favorable government policies offer many possibilities for AI development in the fintech industry. Additionally, regional market growth is being supplemented by major companies investing in new markets in the region as part of their business strategies.
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recent trends
May 2024: Lemonade expands its AI-powered insurance platform to include new machine learning models to optimize claims processing and improve fraud detection.
July 2024: The company announced an AI-driven auto insurance pricing model that integrates machine learning to detect fraudulent claims and provides more personalized premiums based on driving behavior.
Table of contents – main points
1. Introduction
2. Executive summary
3. Research method
4. Impact analysis of market dynamics
5. Statistical insights and trend reports
6. Competitive environment
7. Artificial Intelligence in Fintech Market Segmentation, by Component
8. Artificial Intelligence in Fintech Market Segmentation by Deployment
9. Artificial Intelligence in Fintech Market Segmentation, by Application
10. Regional analysis
11. Company profile
12. Use cases and best practices
13. Conclusion
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