Global Generative AI in Fintech Market By Component (Service and Software), By Deployment (On-Premises and Cloud), By Application, By End-Use, By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032
- Published date: April 2024
- Report ID: 99019
- Number of Pages: 332
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Report Overview
The Global Generative AI in Fintech Market size is expected to be worth around USD 6,256 Million by 2032, from USD 865 Million in 2023, growing at a CAGR of 22.5% during the forecast period from 2024 to 2033.
Generative AI has boosted the tech industry by permitting companies to automate complex processes. The major reason for the evolution of machine learning is cost reduction, reduced human errors, improved customer experience, and improved efficiency. Generative artificial intelligence is primarily surged by credit card fraud detection. Using Generative Adversarial Network, AI can spot the difference between hacked and real data in every transaction and send alerts to the banks.
The fintech market is the segment of the financial services industry that uses technology to deliver financial products and services. It is a rapidly growing market, and generative AI is one of the key technologies that is driving this growth. AI is now an integral element of the FinTech sector, changing the manner in which finance services are offered. One of the most important functions that AI plays in AI within FinTech is automatization.
The financial institutions use AI-powered chatbots as well as virtual assistants to offer 24/7 support to customers help with queries and help with the basic tasks of financial management. It not only increases efficiency but also improves overall experience for customers.
The customer experience is the top concern for FinTech businesses and generative AI has the potential to be a major factor in improving it. In analyzing data about customers and their preferences and preferences, generative AI algorithms will provide personalized advice and special offers, enhancing the customer’s happiness and retention.
Risk assessment is a different area in which AI is a major advantage in the FinTech sector. Machine learning algorithms can analyze the past and current market conditions to determine the risks associated with a variety of types of financial instruments and investment. Financial institutions can use this information to make more precise risk assessments and guide their decision-making process.
The biggest challenge faced by the majority of fintech companies with generative artificial intelligence is the sensitive issue of data security and privacy. The fintech industry is governed by strict rules and regulations since any security and data breach failure could be destructive.
Key Takeaway
- By 2032, the Generative AI in Fintech Market is anticipated to reach USD 6,256 Million with compounded annual growth rate projected at 22.5% from 2023-2032.
- The Global Generative AI Market size is expected to be worth around USD 255.8 Billion by 2033, from USD 13.5 Billion in 2023, growing at a CAGR of 34.2% during the forecast period from 2024 to 2033.
- The software segment recorded the largest revenue share of 70% in 2022.
- North America leads the generative AI in the fintech market by accounting for a major revenue share of 37%.
- 82% of financial institutions are actively exploring or implementing Generative AI solutions to enhance their operations and services.
- Banks and financial firms using Generative AI for customer service and personalization could see a 20% increase in customer satisfaction scores by 2024.
- The integration of Generative AI into anti-money laundering (AML) and fraud detection processes could lead to a 50% reduction in false positives by 2024.
- Generative AI could improve the accuracy of credit risk assessment models by up to 25%, resulting in better lending decisions.
- The demand for Generative AI solutions in regulatory compliance and reporting is expected to grow by 40% in 2023.
- The use of Generative AI in financial trading and portfolio management could lead to a 10% improvement in investment returns by 2024.
- The adoption of Generative AI in the fintech industry is expected to create over ~1 million new jobs globally by 2025, primarily in areas such as AI development, data analysis, and financial advisory services.
- The integration of Generative AI with cybersecurity solutions could lead to a 30% reduction in data breaches and cyber attacks in the financial industry by 2024.
- The use of Generative AI in insurance underwriting and claims processing could lead to a 25% reduction in operational costs by 2024.
Component Analysis
In 2022, the software segment within the generative AI in fintech market held a dominant position, capturing more than a 70% share. This significant market share can be attributed to the essential role that software solutions play in enabling the deployment of generative AI technologies within financial services. Software in this context includes platforms and tools that facilitate the creation, training, and implementation of AI models for various financial applications.
The demand for these software solutions has been driven by their capability to provide tailored financial recommendations, automate complex processes, and enhance decision-making through data analysis. Financial institutions are increasingly investing in AI software to remain competitive, improve operational efficiencies, and offer innovative services to their clients.
Moreover, the software segment’s leadership is further solidified by the rapid advancements in AI technology, which have made these tools more accessible and effective. Financial firms leverage AI software to process large volumes of data for risk assessment, fraud detection, customer service automation, and personalized financial advice. The scalability and adaptability of AI software allow for its application across different financial operations, contributing to its substantial market share.
Deployment Analysis
Based on deployment on-premises segment has dominated the generative AI in the fintech market. The cloud deployment model is expected to witness significant growth during 2023-2032. Generative AI is at a developing stage, and its influence may be significant during the forecasted period. With the adoption of generative AI in the finance sector, many startups are competing with major players.
Exponential growth is expected in the fintech industry with the development of technologies, such as cybersecurity and blockchain, with generative AI. Some major companies, such as IBM and Google, have developed their blockchain. The technological development is driven by an increasing focus on cloud service which further demand for cloud deployment of generative AI technological solutions.
Note: Actual Numbers Might Vary In The Final Report
Application Analysis
The compliance & fraud detection segment held the largest share, followed by business analytics & reporting in the market in 2022. Generative AI is used for finding the relation between global events and their impact on prices by use of predictive analysis. Generative AI in financial services is essential to protect the details of customers.
Generative AI plays a crucial role in assessing algorithms from fraudulent cases. It is also used to advise accurate results. P2P organization analyzes its potential customer’s behavior and calculates all the risks in the cooperation with the customer. The generative AI also analyses consumers’ details that don’t have a previous credit history. These applications are the major driver of the adoption of generative AI in the fintech sector.
Based on End-Use Industry
Retail and banking firms use generative AI for models to train know-your-customer (KYC) processes at the time of account opening. The financial technology will efficiently search through non-numerical loan application data such as business plans. Generative AI will accelerate back-office tasks, such as answering performance questions in real-time.
It can help with situation analysis under multiple economic conditions. Investment banking will generate a stress-test situation for illiquid financial products to inform the proper accordance measures and reduce cost. Generative AI will stimulate multiple client needs and economic situations so financial institution advisors can give situation-specific financial advice recommendations.
Key Market Segments
Based on Component
- Service
- Software
Based on Deployment
- On-Premises
- Cloud
Based on Application
- Credit Scoring
- Compliance & Fraud Detection
- Personal Assistants
- Digital assistants
- Financial assistants
- Asset Management
- Predictive Analysis
- Insurance
- Debt Collection
- Business Analytics & Reporting
- Customer Behavioral Analytics
Based on End-Use Industry
- Retail Banking
- Investment Banking
- Stock Trading Firms
- Hedge Funds
- Other Industries
Drivers
Focus of Companies on Cost Reduction and Improving Efficiency
The generative AI in fintech will allow companies to reduce their cost to automate their processes and cut down the possibilities of error. Generative AI is empowering small finance companies as it is affordable and has fewer chances of error occurrence.
Generative AI Chatbots are used by multiple companies as customer assistants for multiple purposes like sales, online chat executive, and customer care executive. The significant details about cash flow and expenses are gaining momentum from the end user as this helps industries to reduce their expenses.
Restraints
Adaptation of Generative AI to Changing Rules and Regulations
Loan decisions constructed data generated by generative artificial intelligence is difficult to audit, which may cause negative in loan decisions.
In addition, rules and regulations are continuously changing; generative AI won’t be able to examine and process the proper regulatory environment. Generative AI won’t be able to train the trading algorithm, as markets are unpredictable.
Opportunity
New Technological Advancements Creating Various Opportunities
New technology such as robo-advisors keeps surveillance on the stocks, events, price trends, and bonds according to user’s needs which helps them for making suggestions and decisions regarding the stock about to be bought or sold. It plays a crucial role in risk management, network security access to big data, speech recognition, etc. These technological developments will create a new opportunity for generative AI in the fintech market.
Trends
Using Generative AI for increasing productivity
The growing popularity of generative AI in fintech assists chatbots in holding efficient conversations and boosting customer satisfaction, leading to market growth. The rising perception of generative AI in the fintech industry for synthetic data generation, fraud detection, trading prediction, and risk factor modeling is driving the market growth.
The significant growth in the IT sector with increasing usage of generative artificial intelligence integrated systems over various verticals for increasing productivity and sharpness is primarily propelling the global generative AI in the fintech market.
Regional Analysis
North America Dominated with 37% Market Share in 2022
North America leads the generative AI in the fintech market by accounting for a major revenue share of 37%. The growth of the North American region is due to many startups and key players offering generative AI services to financial services providers.
The increasing adoption of generative AI in fintech by various businesses in the region is driving the growth of generative AI in the fintech market in the North American region. The major applications include business analytics & reporting, virtual assistant, and customer behavioral analytics.
Asia Pacific is anticipated to grow at the fastest CAGR during the forecast period. The growth of the Asia Pacific region is attributed to the rising demand for generative AI-based solutions in the region. In addition, many businesses are adopting generative AI in fintech, fueling the growth of generative AI in the business market of the region.
Note: Actual Numbers Might Vary In The Final Report
Key Regions and Countries Covered in this Report
- North America
- The US
- Canada
- Mexico
- Western Europe
- Germany
- France
- The UK
- Spain
- Italy
- Portugal
- Ireland
- Austria
- Switzerland
- Benelux
- Nordic
- Rest of Western Europe
- Eastern Europe
- Russia
- Poland
- The Czech Republic
- Greece
- Rest of Eastern Europe
- APAC
- China
- Japan
- South Korea
- India
- Australia & New Zealand
- Indonesia
- Malaysia
- Philippines
- Singapore
- Thailand
- Vietnam
- Rest of APAC
- Latin America
- Brazil
- Colombia
- Chile
- Argentina
- Costa Rica
- Rest of Latin America
- Middle East & Africa
- Algeria
- Egypt
- Israel
- Kuwait
- Nigeria
- Saudi Arabia
- South Africa
- Turkey
- United Arab Emirates
- Rest of MEA
The generative AI in the fintech market is fragmented into many companies. Key players in the generative AI in the fintech market are focusing on different strategies to expand their market share across various regions.
Strategies like collaboration, partnership, merging, and acquisition are adopted by the companies. Some of the major companies in the generative AI market are Microsoft Corporation, Open AI, Microsoft Corporation, Google LLC, Genie AI Ltd., IBM Corporation, MOSTLY AI Inc., Veesual AI, Adobe Inc., Synthesis AI, Paige.AI, Rephrase.ai, Other Key Players.
Market Key Players
Listed below are some of the most prominent generative AI in fintech industry players.
- Open AI
- Microsoft Corporation
- Google LLC
- Genie AI Ltd.
- IBM Corporation
- MOSTLY AI Inc.
- Veesual AI
- Adobe Inc.
- Synthesis AI
- AI
- Other Key Players
Recent Developments
- In September 2023, Bank of America collaborated with Palantir to create a new fraud detection system. This system uses machine learning to analyze large data sets, enabling it to continuously learn and identify suspicious activities effectively. By adapting to emerging trends in financial transactions, this innovative tool significantly enhances the ability to detect and reduce financial fraud. This development represents a significant step forward in the fintech sector’s ongoing efforts to improve security measures and safeguard against fraudulent activities
- In August 2023, UK-based fintech company Bud Financial launched the Bud.ai platform. This AI-driven system transforms transaction data into customized banking experiences. It helps financial institutions understand their customers better and deliver personalized services. Bud also introduced Jas, a generative AI chatbot that not only offers recommendations but also performs tasks, enhancing both customer interaction and operational efficiency.
- In May 2023, Trovata, known for its expertise in bank APIs and cash management, debuted Trovata AI. This tool incorporates OpenAI’s ChatGPT technology to streamline cash workflows and enhance business intelligence for finance, accounting, and treasury operations. Supported by major banks and managing over ~$100 billion for its clients, Trovata AI merges ChatGPT’s conversational abilities with financial analytics. This enables quick financial planning and reporting, allowing users to gain insights and produce reports almost instantaneously.
Report Scope
Report Features Description Market Value (2023) USD 865 Mn Forecast Revenue (2032) USD 6,256 Mn CAGR (2023-2032) 22.5% Base Year for Estimation 2023 Historic Period 2016-2022 Forecast Period 2023-2032 Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments Segments Covered By Component – Service and Software, By Deployment – On-Premises and Cloud, By Application – Credit Scoring, Compliance & Fraud Detection, Personal Assistants, Asset Management, Insurance, Debt Collection, Business Analytics & Reporting, and Customer Behavioral Analytics, By End-Use Industry – Retail Banking, Investment Banking, Stock Trading Firms, Hedge Funds, and Other Industries. Regional Analysis North America – The US, Canada, & Mexico; Western Europe – Germany, France, The UK, Spain, Italy, Portugal, Ireland, Austria, Switzerland, Benelux, Nordic, & Rest of Western Europe; Eastern Europe – Russia, Poland, The Czech Republic, Greece, & Rest of Eastern Europe; APAC – China, Japan, South Korea, India, Australia & New Zealand, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, & Rest of APAC; Latin America – Brazil, Colombia, Chile, Argentina, Costa Rica, & Rest of Latin America; the Middle East & Africa – Algeria, Egypt, Israel, Kuwait, Nigeria, Saudi Arabia, South Africa, Turkey, United Arab Emirates, & Rest of MEA Competitive Landscape Open AI, Microsoft Corporation, Google LLC, Genie AI Ltd., IBM Corporation, MOSTLY AI Inc., Veesual AI, Adobe Inc., Synthesis AI, Paige.AI, Rephrase.ai, and Other Key Players. Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements. Purchase Options We have three licenses to opt for Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF) Frequently Asked Questions (FAQ)
What is the size of the Generative AI in Fintech Market in 2022?The Generative AI in Fintech Market size was estimated to be USD 865 million in 2022.
What is the projected CAGR at which the Generative AI in Fintech Market is expected to grow at?The Generative AI in Fintech Market is expected to grow at a CAGR of 22.5% (2023-2032).
List the key industry players of the Generative AI in Fintech Market?Open AI, Microsoft Corporation, Google LLC, Genie AI Ltd., IBM Corporation, MOSTLY AI Inc., Veesual AI, Adobe Inc., Synthesis AI, AI, ai, Other Key Players engaged in the Generative AI in Fintech Market.
Which region is more appealing for vendors employed in the Generative AI in Fintech Market?North America leads the generative AI in the fintech market by accounting for a major revenue share of 37%.
Generative AI in Fintech MarketPublished date: April 2024add_shopping_cartBuy Now get_appDownload Sample - Open AI
- Microsoft Corporation Company Profile
- Google LLC
- Genie AI Ltd.
- IBM Corporation
- MOSTLY AI Inc.
- Veesual AI
- Adobe Inc.
- Synthesis AI
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