AI in Fintech Market: Global Industry Analysis and Forecast (2024-2030) by Component, Deployment, Application and Region

AI in Fintech Market Overview

Artificial Intelligence (AI) in Fintech refers to using computer programs and learning machines to make finance-related tasks easier and automatic. Fintech, which is just short for Financial Technology, is all about merging finance with technology. The application of AI in fintech helps to do financial process and services better and faster.

 

AI in Fintech market is growing as there is increase in adoption of digitalization globally in Banking and Finance Sector (BFSI).  The use of AI in Fintech is revolutionizing the FinTech industry as financial operations, fraud detection, Algorithmic Trading and Personalized Financial is done by AI efficiently and quickly, which is growing the overall demand for AI in Fintech Market. Another key driving factor of AI in Fintech is the ability of AI to tackle and reduce fraudulent activities, authenticate transactions, increase security, and respond to threats. The Growing demand of AI in Fintech market is catered by technologies like Chabot, virtual assistants, Machine Learning (ML), Fraud Detection and Natural Language Processing (NLP) tools.

 

Recent advancement in technologies like Robotic Process Automation (RPA), regular finance operations like data entry and document processing increases efficiency and as consumers prefer these quick processes, the demand for AI in Fintech Market is surging. AI implementation in Investment Analysis, Payment Processing and Portfolio Management Optimization is going to play crucial role in AI in Fintech market as these technologies drives the overall growth of the market.

 

North America dominates the Global AI in Fintech market with the help of dominance of leading AI software and system providers, coupled with investments by financial institutions in AI initiatives. The dominance in market share is supported by US, and Canada, with US contributing to 25% of total global revenue share. Companies such as Microsoft, IBM, and Oracle operating in AI in Fintech market are contributing to the rapid growth of the Global AI in Fintech market in North America.

 

Europe region holds second largest market share of 28% globally in AI in Fintech market. With companies like OakNorth, Parashift, and Revolut, the AI in Fintech market in Europe is expected to grow at a CAGR of 15%. APAC is expected to grow at highest CAGR with large contribution from emerging countries and developed countries such as India, China, Japan and Australia.

 

 

AI in Fintech Market Dynamics

 

Rising Adoption of AI solutions driving the growth of AI in Fintech Market

 

Around 20% Fintech professionals have started to use AI solutions for work. AI-powered virtual assistants play important role in safeguarding customer data and financial transactions, ensuring the overall security of financial information. These virtual assistants offer immediate support by answering customer questions and aiding with financial transactions in real time. By using predictive analytics, virtual assistants recognize user patterns and preferences, empowering fintech companies to deliver personalized financial products and services which drive the overall AI in Fintech market. Automate financial tasks like account registration and transaction processing, enhancing efficiency and cutting operational costs key factors supporting the growth of AI in Fintech market. Virtual assistants, frequently referred to as chatbots, employ advanced natural language processing (NLP) and machine learning algorithms to comprehend user inputs effectively, providing pertinent and context-aware responses.

 

 

The increase in Fintech applications using AI solutions is playing crucial role, like providing strategic investment advisory to clients with the help of robo advisory. When it comes to performing analysis of consumer behaviour, neural networks play an important role in pattern recognition and undergo training to detect potential fraudulent activities within financial transactions. Other tools like Decision trees serve as effective tools for predictive modelling, to recognize lucrative investment prospects. Support Vector Machines (SVMs) are employed in credit risk assessment, leveraging customer data analysis to deliver personalized credit scores.

 

Growing investments and funding for start-ups providing AI solutions in Fintech

Recent developments done by companies like Unit21, a fintech company, has developed AI-driven fraud prevention strategies and tools. Adoption of AI in client’s portfolio advisory insights, alternative investing, wealth management and insurance has increased with the help of companies like TIFIN and J.P. Morgan who announced launch of TIFIN.AI, which cater these applications and increase the demand for AI in Fintech market. Companies like Axyon AI have raised 1.6 million USD, Forwardlane have received 8.6 million USD which help the companies to grow and cater to growing demand of AI in Fintech market. OakNorth has developed digital-focused bank using AI-powered platform called ACORN.

 

NetGuardians  helps over 50 Tier 1 to Tier 3 banks globally to fight financial crime, by developing an “augmented intelligence” solution made for banks to proactively prevent fraud. The company claims that banks using its solution achieve 83% reduction in false positives and save 93% of the time lost in fraud investigation. Parashift develops AI-based accounting document management technologies which it offers through a SaaS platform and APIs. SESAMm, Kabbage (part of American Express), Upstar, Cleo, Skyline AI, Numerai, Lingxi and Zestfinance are few major companies providing advancement in AI in Fintech market with the use of funding provided to them.

 

Regulatory Compliance and Ethical Considerations in AI in Fintech Market

 

Regulatory Compliance plays an important role in AI in Fintech Market as around 100 million USD violations happened in securities or trading, around 30million USD credit lending violation and around 90 million USD customer information violation related. The European Union has given precise guidelines to regulate the utilization of artificial intelligence (AI) in FIntech. Regulations, with a primary focus on transparency, accountability, and ethical considerations, are designed to safeguard individual rights and uphold data privacy standards. Ethical Considerations play an important role in AI in Fintech market as concerns like biases, discrimination, transparency need to be addressed and devices need to train properly.

 

In US, the Federal Deposit Insurance Corporation (FDIC) serves as the principal federal regulatory authority for state-chartered banks not affiliated with the Federal Reserve System. FDIC is actively engaged in a substantial initiative to modernize the bank call report, incorporating advancements in Fintech and artificial intelligence solutions. The National Credit Union Administration (NCUA) holds the responsibility of chartering national credit unions and overseeing both national and state-chartered credit unions. NCUA has adopted a deliberate and cautious approach in response to Fintech-related developments.

 

AI In Fintech Market Segment Analysis

By Component, the solution segment dominates the AI in Fintech market as solutions are used in various areas such as investment management, personalized financial planning, loan processing, and risk management. Use AI driven solution is growing due to prevalence of software tools, crucial for implementing AI-powered solutions within the banking industry. Software tools play an important role in extracting accurate and comprehensive data efficiently and in a timely manner which drive the demand for overall AI in Fintech Market.

 

 

North America dominates in solution based AI in Fintech Market. Expanding retail banking through next-best-action software, detecting and preventing financial fraud, and elevating client interactions with multichannel customer experience solutions. Companies like Versapay acquired DadeSystems Inc., a fintech company renowned for its cash application solutions. This acquisition aimed to increase Versapay's capabilities in accounts receivable automation, leveraging advanced technologies like AI and machine learning. TangoPay, UK based company decided to integrate ThetaRay's cloud-based SONAR solution, increasing capabilities to monitor and identify financial crime risks, including the identification of novel and sophisticated money-laundering and terrorist financing schemes.

 

By Deployment mode, the on-premises deployment model allows businesses to implement software or services directly onto the hardware or infrastructure of a financial institution. Due to concerns related to data security, regulatory compliance, and the imperative for heightened control on-premises deployment are preferred.

 

Fintech start-ups are using the capabilities of cloud-based artificial intelligence and machine learning services for developing predictive analytics models, streamlining decision-making processes, and tailoring customer experiences. The scalability, cost-effectiveness, and global accessibility offered by the cloud gives a competitive advantage to fintech companies, that is reason for growing demand for Cloud based deployment in AI in Fintech market.

 

AI in Fintech Competitive Landscape

 

In 2023, California based company Squared introduced ten new generative AI features for payment solutions and provides tools for fraud detection and risk management. NatWest and IBM have collaborated for a Generative AI Initiative aimed at elevating the overall customer experience. Private American venture capital firm Andreessen Horowitz made $60 Million AI Fintech Investment. S&P Global acquired Kensho, an AI specialized company providing financial company, for around 550 Million USD.

 

HSBC has ventured into the Banking as a Service (BaaS) sector by integrating its corporate banking solutions into Oracle's NetSuite cloud Enterprise Resource Planning (ERP) platform. Amelia entered into a strategic partnership with BuildGroup and Monroe Capital with $175 million investment to provide financial capital and business leadership adopt Amelia’s Trusted AI products.

 

The purpose of this research is to provide stakeholders in the industry with a thorough insight into the Global Saffron Market. The study includes an analysis of difficult data in simple language, as well as the industry's historical and current state, as well as expected market size and trends. The analysis examines all areas of the industry, with a focus on significant companies such as market leaders, followers, and newcomers.

 

The research includes a PORTER, PESTEL analysis as well as the possible influence of microeconomic market determinants. External and internal elements that are expected to have a favourable or negative impact on the firm have been examined, providing decision-makers with a clear future vision of the industry.

 

The research also aids in comprehending the Global Saffron Market dynamics and structure by studying market segments and forecasting market size.

 

The research is an investor's guide since it clearly depicts competitive analysis of major competitors in the Global Saffron Market by product, price, financial situation, product portfolio, growth plans, and geographical presence.

 

AI in Fintech Market Scope
Market Size in 2023	USD 15 Bn.
Market Size in 2030	USD 39.90 Bn.
CAGR (2024-2030)	15%
Historic Data	2018-2022
Base Year	2023
Forecast Period	2024-2030
Segment Scope	By  Deployment Mode Cloud On-premises
	By Components Solutions Services
	By Application Virtual Assistant (Chatbots) Business Analytics and Reporting Others
Regional Scope	North America- United States, Canada, and Mexico Europe – UK, France, Germany, Italy, Spain, Sweden, Austria, and Rest of Europe Asia Pacific – China, India, Japan, South Korea, Australia, ASEAN, Rest of APAC Middle East and Africa - South Africa, GCC, Egypt, Nigeria, Rest of the Middle East and Africa South America – Brazil, Argentina, Rest of South America

 

AI in Fintech Market Players

• IBM Corporation
• Oracle
• Amelia U.S. LLC
• Upstart Network, Inc
• OakNorth
• Parashift
• Revolut
• Squared
• J.P. Morgan
• Unit21
• TIFIN
• DadeSystems Inc
• Ant Group
• Affirm Inc.