The worldwide artificial intelligence (AI) market is estimated to imagine an enormous value and of $5.26 trillion by 2035 and to expand at a vigorous Compound Annual Growth Rate (CAGR) of 30.84% from its predicted size of $273.6 billion. The use of AI technologies has increased significantly in recent years, and the BFSI sector has been at the forefront of this unprecedented growth.
The banking, financial services and insurance (BFSI) industry is leading the way in adopting AI for operational requirements, customer experience and security. AI is also being widely used by banks and finance institutions for advanced fraud detection and risk analysis, again using complex algorithms to spot out-of-the-ordinary patterns and prevent threats in a highly precise manner.
AI-driven automated customer service such as chatbots and virtual assistants are revolutionizing the way clients are serviced with round-the-clock availability, tailored recommendations, and efficient query response times.
AI is now being used as back end application in BFSI: Apart from customer facing applications, AI is increasingly being used to improve back office operations in BFSI. It streamlines recurring processes such as data ingestion, reconciliation and compliance scanners that result in significant cost savings and operational efficiency.
Generative AI, a newer area, is being used to automate some of these tasks, and much more, including financial contract analysis or even the generation of code to modernize IT infrastructure.
The business case for BFSI companies to invest in AI is increasingly being supported by an understanding of its potential to innovate and grow revenue. North America is estimated to account for the largest share of the AI market, and market in APAC is projected to grow at the highest CAGR, owing to the high adoption of AI technologies and growing awareness about the benefits of AI in the region.
With AI getting more sophisticated, the value it provides in terms of facilitating data-driven decisions, security enhancements and delivering hyper-personalized services, will only establish it further as a must-have instrument that will help BFSI institutions in their ongoing journey.
