With the growing requirement for better customer engagement, the incorporation of artificial intelligence (AI) is surging in the banking, financial services, and insurance (BFSI) sector. Moreover, companies operating in this industry are increasingly adopting AI-powered chatbots for improving efficiency, increasing client satisfaction, and maintaining customer loyalty. For example, Erica, which is an AI-powered chatbot tool, was developed by the Bank of America recently. It provides financial assistance to clients via text and voice messages.

This service helps people in performing various day-to-day transactions and it is available 24X7. The integration of AI also assists BFSI companies in tracking transactional and various other data sources, which helps them in better understanding the behavior and preferences of customers, which, in turn, aids them in delivering personalized services and improving the overall customer experience. Besides, the incorporation of AI also helps BFSI firms achieve improved risk management, which is rapidly becoming a priority, owing to the rising incidence of cybercrimes and data thefts.

Get More Insights: AI in BFSI Market Segmentation Analysis Report

Due to the aforementioned factors, the value of the AI in BFSI market is expected to rise from $3,091.9 million in 2018 to $20,017.9 million by 2024, exhibiting a CAGR of 37.2% from 2019 to 2024. Customer behavior tracking, fraud detection, CRM, chatbot, and data analytics and visualization are the major types of AI-based solutions used by BFSI companies. Out of these, the demand for chatbots was found to be the highest during the last few years, primarily because of the surging requirement for personalized services among customers in financial institutions and banks.

Additionally, chatbots act as a personal finance assistant and assist customers at every stage of banking by providing them with information about various bank offerings, such as customer support and additional banking services and promotional schemes. Geographically, North America dominated the AI in BFSI market in the years gone by, as per the findings of the market research company, P&S Intelligence. This was because of the hefty investments made by fintech companies in the region. Moreover, major banks based in the U.S., such as Bank of America Corporation, JPMorgan Chase & Company, U.S. Bancorp, and Wells Fargo & Company, extensively adopted AI-based solutions.

The AI in BFSI market is a rapidly emerging market, with the adoption of the AI technology expected to soar, especially in the U.K., the U.S., and Germany and several emerging economies, such as India and China, by 2030. Currently, major organizations, such as Salesforce.com Inc., Microsoft Corporation, Oracle Corporation, and IBM Corporation are holding a significant portion of the market shares, thereby making the market consolidated in nature. However, the situation will change in the coming years, with the entry of several new players and intensifying competition in the market.

Thus, the adoption of AI-based solutions by companies operating in the BFSI sector will surge massively in the coming years, mainly because of the rapid digitalization of operations and the burgeoning need for better customer engagement and higher efficiency.