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AI in Fintech Market - Growth, Trends, and Forecast (2019 - 2024)

The AI in Fintech Market is segmented by Offering (Solutions, Services), Deployment (Cloud, On-premises), Application (Chatbot, Credit Scoring, Quantitative and Asset Management), and Geography.

Market Snapshot

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Study Period:

2018-2024

Base Year:

2018

Fastest Growing Market:

Asia Pacific

Largest Market:

North America

CAGR:

31.5%

Key Players:

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Market Overview

The AI in fintech market was estimated at USD 5.53 billion in 2018 and is expected to reach USD 26.92 billion by 2024. The market is expected to witness a CAGR of 31.5% over the forecast period 2019-2024. Artificial Intelligence improves results by applying methods derived from the aspects of human intelligence but beyond human scale. The computational arms race since the past few years has revolutionized the fintech companies.

  • Process automation is one of the key drivers of AI in financial organizations. Moreover, it is also evolving into cognitive process automation, where AI systems are able to perform even more complex automation processes.
  • Robotic process automation and machine learning are beginning to play an increasingly significant role in the fintech industry by reducing costs and increasing productivity. With the increase in fraud losses, process automation and machine learning are expected to witness increased adoption.
  • Third-party applications, such as WhatsApp, have integrated in-app transaction system in specific regions, including the Asia-Pacific. This will raise the bar for cyber-attacks and possibilities for fraud, owing to which the incorporation of artificial intelligence is expected to gain traction and propel the market growth.
  • Fintech space is one of the fastest growing industry across the world, owing to the rising penetration of internet users. The users are rapidly switching to mobile devices to perform a transaction or related actions, owing to rising ease and growing internet user base. 

Scope of the Report

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. 
By Offering
Solutions
Services
By Deployment
Cloud
On-premise
By Application
Chatbots
Credit Scoring
Quantitative and Asset Management
Fraud Detection
Other Applications
Geography
North America
Europe
Asia-Pacific
Rest of the World

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Key Market Trends

Fraud Detection Application is Expected to Witness Highest Growth

  • 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.
 
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North America Occupies the Largest Market Share

  • North American region 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.
  • Furthermore, slackening of federal regulations, enacting national data breach protections and drafting model laws at the state level to reduce overlapping red tape, could help promote fintech companies in the United States, according to the report released by the US Treasury Department, in 2017.
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Competitive Landscape

AI in Fintech market is highly competitive due to the presence of many large players in the market. The market appears to be consolidated as few of the major players currently dominate the market. Various acquisitions and collaboration of large companies are expected to take place shortly which focuses on innovation. Some of the major players in the market are IBM Corporation, Intel Corporation, Microsoft Corporation among others.

  • October 2018 - IBM announced the decision to acquire Red Hat, Inc. for USD 34 billion. By this acquisition, IBM is set to become the world's number one hybrid cloud provider, offering companies the only open cloud solution that may unlock the full value of the cloud for their businesses. In line with these developments in mid-October, IBM unveiled the world’s first multi-cloud management technology to make it easier to manage, move, and integrate apps across different cloud computing infrastructures, with increased visibility of business processes, governance, and security.

Major Players

  1. IBM Corporation
  2. Intel Corporation
  3. Microsoft Corporation
  4. IPsoft Inc.
  5. Next IT Corp

* Complete list of players covered available in the table of contents below

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Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Scope of the Study

    3. 1.3 Study Assumptions

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Introduction to Market Dynamics

    3. 4.3 Market Drivers

      1. 4.3.1 Increasing Demand for Process Automation Among Financial Organizations

      2. 4.3.2 Increasing Availability of Data Sources

    4. 4.4 Market Restraints

      1. 4.4.1 Need for Skilled Workforce

    5. 4.5 Industry Attractiveness - Porter's Five Force Analysis

      1. 4.5.1 Bargaining Power of Suppliers

      2. 4.5.2 Bargaining Power of Buyers/Consumers

      3. 4.5.3 Threat of New Entrants

      4. 4.5.4 Threat of Substitute Products

      5. 4.5.5 Intensity of Competitive Rivalry

  5. 5. TECHNOLOGY SNAPSHOT

  6. 6. EMERGING USE-CASES FOR AI IN FINANCIAL TECHNOLOGY

  7. 7. MARKET SEGMENTATION

    1. 7.1 By Offering

      1. 7.1.1 Solutions

      2. 7.1.2 Services

    2. 7.2 By Deployment

      1. 7.2.1 Cloud

      2. 7.2.2 On-premise

    3. 7.3 By Application

      1. 7.3.1 Chatbots

      2. 7.3.2 Credit Scoring

      3. 7.3.3 Quantitative and Asset Management

      4. 7.3.4 Fraud Detection

      5. 7.3.5 Other Applications

    4. 7.4 Geography

      1. 7.4.1 North America

      2. 7.4.2 Europe

      3. 7.4.3 Asia-Pacific

      4. 7.4.4 Rest of the World

  8. 8. COMPETITIVE LANDSCAPE

    1. 8.1 Company Profiles

      1. 8.1.1 IBM Corporation

      2. 8.1.2 Intel Corporation

      3. 8.1.3 ComplyAdvantage.com

      4. 8.1.4 Narrative Science

      5. 8.1.5 Amazon Web Services Inc.

      6. 8.1.6 IPsoft Inc.

      7. 8.1.7 Next IT Corporation

      8. 8.1.8 Microsoft Corporation

      9. 8.1.9 Onfido

      10. 8.1.10 Ripple Labs Inc.

      11. 8.1.11 Active.Ai

      12. 8.1.12 TIBCO Software (Alpine Data Labs)

      13. 8.1.13 Trifacta Software Inc.

      14. 8.1.14 Data Minr Inc.

      15. 8.1.15 Zeitgold GmbH

    2. *List Not Exhaustive
  9. 9. INVESTMENT ANALYSIS

  10. 10. MARKET OPPORTUNITIES AND FUTURE TRENDS

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