Generative AI in Fintech Market Share

Generative AI in Fintech Market Overview

Generative AI in Fintech Market Size was valued at USD 892.4 million in 2022. The generative AI in fintech Market is projected to grow from USD 1,111.0 million in 2023 to USD 7,984.6 million by 2032, exhibiting a compound annual growth rate (CAGR) of 24.5% during the forecast period (2023 - 2032).

In the rapidly evolving landscape of financial technology (FinTech), a new era of transformation is ushered in by the remarkable advancements of generative artificial intelligence (AI). As the technology matures, it is poised to revolutionize and reshape the very foundation of the FinTech sector, introducing unparalleled levels of innovation and efficiency.

Generative AI, exemplified by groundbreaking technologies such as Bard, and ChatGPT, holds the potential to fundamentally alter how financial institutions operate and serve their clients. Its ability to generate text, images, audio, and synthetic data has already led to a surge in applications that streamline processes and enhance decision-making. From automating customer interactions to creating tailored financial reports, generative AI's scope is vast, promising to redefine the customer experience and internal workflows.

The fintech sector, which currently holds a mere 2% share of global financial services revenue, is projected to experience a significant transformation. It is predicted that by 2030, it could amass a US$ 1.5 trillion in annual revenue, accounting for nearly a quarter of the total global banking valuation.

Further, the industry goliaths such as NVIDIA, Microsoft, and Google underscore the gravity of this potential, as substantial investments are channeled into research and development. A critical factor in the integration of generative AI into FinTech is ensuring data privacy and accuracy.

FIGURE 1: GENERATIVE AI IN FINTECH MARKET SIZE 2019-2032 (USD MILLION) 

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Generative AI in Fintech Market Trends

Booming Fintech Industry and Introduction of Generative AI

Generative artificial intelligence (AI) is rapidly revolutionizing industries, and the financial technology (fintech) and banking sectors stand to gain significantly from these advancements. Generative AI is reshaping the landscape of financial institutions, from fraud detection and risk evaluation to personalized customer experiences and tailored financial strategies. Some studies reflect that generative AI could yield around US$ 1,200 in annual savings for consumers through personalized financial advice. Also, generative AI can curtail fraud losses of financial institutions by 50%. It also has the potential to automate nearly 40% of customer service tasks. Generative AI can enhance risk identification and mitigation by up to 10% more than conventional methods.

Additionally, personalized financial planning benefits from generative AI's data analysis prowess, suggesting investment strategies tailored to individual preferences. Algorithmic trading and market analysis capitalize on accurate predictions drawn from historical data and news sentiment. The continued evolution of this technology promises even more profound advancements, shaping a future of finance that's both efficient and customer-driven, thus driving the generative AI demand in fintech industry.

Generative AI in Fintech Market Segment Insights

Generative AI in Fintech Market Component

The global generative AI in fintech market, in this report, has been segmented based on component into software and services. Software seems to be ruling in the generative AI in fintech Market. Generative AI software is gaining traction in the fintech market because it can automate complex tasks, analyze data patterns, and generate realistic financial scenarios. This technology offers benefits such as risk assessment, fraud detection, portfolio optimization, and customer service improvements. By utilizing generative AI, fintech companies can enhance their offerings, improve decision-making processes, and streamline operations in an evolving digital landscape.

Generative AI in Fintech Market Deployment

The global generative AI in fintech market, in this report, has been segmented on the basis of deployment into on-premises and cloud. Cloud is gaining traction. Cloud-based deployment dominates in the generative AI fintech market due to its scalability, flexibility, and cost-effectiveness. Cloud platforms provide the computational power needed for resource-intensive AI tasks without the need for substantial upfront investments in hardware. They enable fintech companies to easily access and deploy generative AI models, allowing rapid experimentation and iteration. Additionally, cloud services offer seamless updates, security features, and global accessibility, making them an ideal choice for fintech companies seeking to leverage generative AI capabilities effectively.

FIGURE 2: GENERATIVE AI IN FINTECH MARKET SIZE BY DEPLOYMENT 2022 VS 2032, (USD MILLION)

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Generative AI in Fintech Market Application

The generative AI in fintech market in this report has been segmented on the basis of application into fraud prevention, algorithmic trading, ai-personalized finance, ai-chatbots, advanced risk management, anti-money laundering, portfolio management, customer service automation, and others. Ai-personalized finance is growing.

AI-Personalized Finance is gaining momentum due to its ability to leverage abundant digital data for tailored financial insights. Offering customized financial plans, investment advice, and user-friendly recommendations, it addresses consumers' desire for personalized experiences. This trend is driven by data availability, complex financial products, cost-effective advice, real-time insights, and regulatory changes promoting data sharing. It improves financial literacy, enhances user experience, and empowers individuals to manage their finances effectively. Fintech companies are adopting AI-Personalized Finance to stand out in the market, fostering customer loyalty and attracting new clients. As AI technology advances, the potential for predictive insights and automated decision-making further positions AI-Personalized Finance as a key player in reshaping how people engage with their finances.

Generative AI in Fintech Market End-Use Industry

The generative AI in fintech market in this report has been segmented on the basis of end-use industry into hedge funds, investment banking, retail banking, stock trading firms, and other industries.

Retail banking is a significant adopter of AI-Personalized Finance. Many retail banks have integrated AI-powered chatbots, mobile apps, and online platforms to offer personalized financial advice, budgeting tools, investment suggestions, and account management. This is due to the surging need to enhance customer engagement, provide value-added services, and remain competitive in a digital-first banking landscape. Thus, driving the segment growth.

Generative AI in Fintech Market- Regional Insights

Based on Region, the global generative AI in fintech is segmented into North America, Europe, Asia-Pacific, Middle East & Africa, and South America. Further, the major countries studied in the market report are the U.S., Canada, Germany, UK, Italy, Spain, China, Japan, India, Australia, UAE, and Brazil.

Among the different regions, the Asia-Pacific (APAC) region, especially emerging economies such as China, India, and Southeast Asia, is expected to play a pivotal role. These areas are anticipated to contribute approximately 42% of the incremental revenues, taking the lead in expanding financial services accessibility. Following closely is North America, which presently stands as the largest fintech market, maintaining its role as a prominent innovation hub.

Europe and Latin America are also expected to witness robust growth, buoyed by regulatory frameworks that encourage the development of the fintech sector. Meanwhile, Africa presents a unique opportunity to build a novel financial ecosystem unburdened by legacy systems. This global shift in the fintech landscape holds the potential to reshape the dynamics of finance and redefine the sector's influence on a global scale.

FIGURE 3: GENERATIVE AI IN FINTECH MARKET SIZE BY REGION 2022 VS 2032, (USD MILLION)

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

The APAC region is witnessing rapid growth in the fintech industry, fueled by factors such as digital transformation, financial inclusion, and innovative technologies. China aims to lead this transformation by achieving significant advancements in its fintech sector by 2025. It envisions a "digitalized, intelligent, green, and fair" fintech sector to support strategies like innovation-driven development, digital economy, and carbon neutrality. Fintechs are crucial for enhancing financial inclusion and digital adoption.

Further, India's fintech investment has surged, with over US$ 35 billion invested across segments, doubling its global fintech funding share since 2016. Fintechs are estimated to contribute around US$ 100 billion in enterprise value (EV) in 2021. Similar to Brazil's trajectory, Indian fintechs are projected to capture over US$ 350 billion in EV by FY26, constituting 15% of India's financial services EV. Both incumbents and insurgents stand to benefit, emphasizing customer engagement and retention.

Various trends are shaping India's fintech landscape. This includes the growth of real-time payments, expansion of lending options, wealth tech innovations, insurtech advancements, the rise of fintech infrastructure like banking as a service, and the expansion of neobanks. India's economy is set to witness growth with the addition of affluent and mass-affluent households. MSMEs will drive economic uplift, with an expected 11% CAGR growth. Over 40% of consumers are anticipated to shift to online channels for transactions and purchases. Online consumption, fueled by digital payment modes like UPI, is projected to make up 50% of India's economy by FY26.

India's fintech market is rapidly expanding. In 2021, it stood at US$ 50 billion and is estimated to reach around US$ 150 billion by 2025. The Total Addressable Market is projected to be US$ 1.3 trillion by 2025, with assets under management and revenue reaching US$ 1 trillion and US$ 200 billion by 2030, respectively. Major segments encompass payments, digital lending, insurtech, and wealth tech. The payments landscape could hit US$ 100 trillion in transaction volume and US$ 50 billion in revenue by 2030. India's digital lending market is expected to grow to US$ 350 billion by 2023. The insurtech market is set to surge by 15-fold to US$ 88.4 billion by 2030, making India a rapidly growing global insurance market. Wealthtech is also on the rise, predicted to reach US$ 237 billion by 2030 due to increasing retail investors. Such factors driver generative AI market growth with growing fintech industry.

Generative AI in Fintech Market Key Market Players and Competitive Insights

Market players operating in the generative AI in fintech sector have embraced a range of strategic approaches to foster growth and innovation in this dynamic landscape. These strategies are designed to leverage the potential of generative AI technology while addressing the unique challenges and opportunities presented by the financial technology sector. Market players’ prominent growth strategy involves continuous product innovation. Companies in this space are committed to refining and expanding their generative AI solutions. By enhancing the accuracy of financial predictions, risk assessments, fraud detection, and personalized financial advice, these players aim to deliver increasingly sophisticated tools that cater to the evolving needs of financial institutions and customers.

Further, strategic partnerships and collaborations also play a pivotal role in growth endeavors. Fintech firms specializing in generative AI forge strategic alliances with established financial institutions, banks, and emerging fintech startups. Through these partnerships, generative AI capabilities are seamlessly integrated into existing financial systems, enabling institutions to leverage advanced insights and data-driven decision-making.

Generative AI in Fintech Market Key Companies Include

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  Adobe Inc.

  
  


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  Genie AI Ltd.

  
  


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  Google LLC

  
  


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  IBM Corporation

  
  


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  Microsoft Corporation

  
  


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  MOSTLY AI Inc.

  
  


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  Open AI

  
  


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  Palantir

  
  


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  Synthesis AI

  
  


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  Trovata AI 

  
  


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  Veesual AI

  
  

Generative AI in Fintech Market Industry developments

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  August 2023, UK FinTech Bud Financial recently launched the Bud.ai platform, an AI-powered system that translates transaction data into personalized banking experiences. The platform enables financial organizations to gain valuable customer insights and achieve scalable personalization. Bud's new product, Jas, is a generative AI chat interface that evolves into an action-bot, offering tailored recommendations and executing tasks. This development optimizes customer engagement and workflow efficiency.

  
  


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  May 2023, Trovata, one of the leaders in bank APIs and cash management, introduces Trovata AI, utilizing OpenAI's ChatGPT tech to automate cash workflows and business intelligence for finance, accounting, and treasury departments. Backed by major banks, Trovata handles $100B+ for mid-market & enterprise clients. The innovative AI integrates ChatGPT's language prowess with finance analytics, allowing quick financial scenario planning and report generation. Users can interact naturally, seeking insights and generating reports almost instantly.

  
  

Generative AI in Fintech Market Segmentation

Generative AI in Fintech Market Component Outlook

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  Service

  
  


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  Software

  
  

Generative AI in Fintech Market Deployment Outlook

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  Cloud

  
  


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  On-Premises

  
  

Generative AI in Fintech Market Application Outlook

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  Fraud Prevention

  
  


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  Algorithmic Trading

  
  


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  Ai-Personalized Finance

  
  


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  Ai-Chatbots

  
  


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  Advanced Risk Management

  
  


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  Anti-Money Laundering

  
  


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  Portfolio Management

  
  


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  Customer Service Automation

  
  


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  Others

  
  

Generative AI in Fintech Market End-Use Industry Outlook

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  Hedge Funds

  
  


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  Investment Banking

  
  


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  Retail Banking

  
  


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  Stock Trading Firms

  
  


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  Other Industries

  
  

Generative AI in Fintech Market Regional Outlook

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  North America

  
  
  
  
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    US

    
    
  
  
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    Canada

    
    
  
  
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    Mexico

    
    
  
  
  
  


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  Europe

  
  
  
  
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    Germany

    
    
  
  
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    France

    
    
  
  
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    UK

    
    
  
  
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    Italy

    
    
  
  
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    Spain

    
    
  
  
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    Rest of Europe

    
    
  
  
  
  


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  Asia-Pacific

  
  
  
  
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    China

    
    
  
  
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    Japan

    
    
  
  
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    India

    
    
  
  
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    South Korea

    
    
  
  
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    Australia

    
    
  
  
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    Rest of Asia-Pacific

    
    
  
  
  
  


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  Middle East & Africa

  
  
  
  
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    Saudi Arabia

    
    
  
  
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    UAE

    
    
  
  
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    South Africa

    
    
  
  
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    Rest of the Middle East & Africa

    
    
  
  
  
  


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  South America

  
  
  
  
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    Brazil

    
    
  
  
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    Argentina

    
    
  
  
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    Chile

    
    
  
  
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    Rest of South America