According to a study by BlueWeave Consulting, the size of AI in the fintech market is set to explode by 2028

The global fintech market is growing at a sustained growth rate globally. In a recent study, BlueWeave Consulting, a strategic consulting and market research firm estimated the size of the global AI in fintech market at $10.14 billion in 2021 and forecasts that it will grow. grow at a robust CAGR (Compound Growth Rate) of 15.8% between 2022 and 2028 to reach $28.11 billion at the end of the analyzed period, or €29.22 billion.

The financial sector was the first to use AI for customer segmentation, fraud detection, credit scoring… The impact of AI on fintech (all financial technologies) has been enormous in recent years . The growth of SMEs worldwide has been an important factor in the expansion of this market that BlueWeave Consulting has just analyzed.

Technological advancements using AI in the fintech market

The use cases cited include that of the Gloria AI Edge Box, which was born in July 2021 from the collaboration between Qualcomm Technologies and Foxconn Industrial Internet and aims to accelerate the use of innovative intelligent applications. This new system processes 70 trillion activities every second.

Meanwhile, Microsoft Corporation has collaborated with Darktrace Holdings, a UK-based cybersecurity AI vendor, to develop auto-ML technology that can identify vulnerabilities at the fastest machine speed. The partnership between the companies provides top-notch protection against modern cyberattacks.

Increased demand for fintech from financial institutions

The expansion of the banking, financial services and insurance (BFSI) sectors, but also those of education, energy, utilities, government and public sector, health and sciences of life, manufacturing, retail and e-commerce, telecommunications and computing have had a direct impact on the growth rate of the AI ​​market.

The demand for real-time information from customers, that of automating the processes of various banking and financial organizations and the growing demand for personalization of payments and loans in the BFSI sector are all having a significant impact on the growth of AI. in the fintech market in the years to come.

The market is therefore booming due to the increased need for process automation of financial institutions. The study reveals that there will be strong potential for market expansion as small and medium enterprises, especially those in developing countries, become more aware of the benefits of cloud-based firewalls.

BlueWeave Consulting gives the example of the Ministry of Finance of the Czech Republic which launched a project in May 2022 to maximize the potential of fintech applications and data used in the country’s financial services. This ministry is responsible for economic policy, tax services, insurance, state budget, banking and security.

The fast-growing cloud segment

Fintech deployment is segmented on-premises and in the cloud. The on-premises segment held a significant market share in 2021 as on-premises deployment allows businesses to implement software or services on a financial institution’s hardware or infrastructure. However, from 2022 to 2028, the cloud segment is expected to grow at a faster CAGR, primarily due to AI-based algorithms that identify current standards, generate suggestions, and learn from historical data in a cloud environment.

Cloud computing and AI can increase yield, efficiency and digital security in data processing and authenticity. This automated method also eliminates human error in data processing. AI deployed in the cloud analyzes past data, adjusts based on it, offers recommendations and assesses current patterns.

Global outlook

The global AI in Fintech market has been studied by region: North America, Europe, Asia-Pacific, Latin America, Middle East & Africa.

North America is expected to hold the highest market share, primarily due to the high importance placed on R&D-based innovations in the industrialized economies of the United States and Canada. These areas have the most competitive and scalable AI markets in fintech. However, Asia-Pacific (APAC) is expected to see the highest growth over the analyzed period due to continuous innovations in AI technology and rapid growth of local businesses.

The impact of Covid

The COVID-19 pandemic and ensuing lockdowns have delayed the expansion of AI into the fintech market, with many retailers still financially impacted today. Many stores have used point-of-sale financing alternatives for their future development. At the same time, these companies use AI-based algorithms to analyze and improve the customer experience.

The competitive landscape

The AI ​​in Fintech Market competitive landscape includes company financials, market potential generated by revenue, R&D investments, new market initiatives, global presence, production sites and facilities, production capabilities, company strengths and weaknesses, product launches, product breadth and breadth, and application dominance.

The data points mentioned above mainly relate to the orientation of companies in the fintech market towards AI. Major companies active in the AI ​​in Fintech market include LargeML, Inc. (US) and FICO Cisco Systems, Inc. (US).

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