How long can financial institutions stay competitive without AI-powered insights?
Are financial services already leveraging AI to enhance customer experience while you’re still relying on traditional methods?
Can your financial organization afford to overlook the precision and efficiency AI brings to risk management and fraud detection?
Have you envisioned a financial future without AI, or are we already witnessing a transformation that could reshape the industry forever?
Artificial Intelligence has evolved from a basic technology to a transformative force across industries, reshaping the very core of financial services. In this sector, where precision, trust, and speed are the basics, AI sets new standards - from reimagining fraud detection mechanisms to creating hyper-personalized customer experiences.
Looking forward to 2034, the growth of AI in finance isn’t merely about efficiency; it's about reshaping power dynamics, driving innovation, and potentially disrupting traditional financial inclusion models. Let’s dive into the emerging trends and insights that reveal just how deeply AI could redefine financial services and what this means for our global economic future.
Financial Services by 2034 (Global Market Size of AI)
Over recent years, AI has transformed the financial services industry exponentially. The Citi GPS report predicts that AI could raise global banking profits to $2 trillion by 2028, largely through productivity gains and automation of routine tasks.[6]
According to Software Oasis, Here’s a look at the growth trajectory of AI in financial services [1]:
Year | Overview | Market Size (Value in USD) |
2021 | AI in finance market size | $7.3 billion |
2021 | The AI finance market projected growth | $341.8 billion |
2021 | North American AI in Finance Market Share | 40% |
2022 | AI adoption in finance | 45% |
2022 | AI in banking market size | $6.8 billion |
2025 | AI adoption in finance expected | 85% |
2025 | AI expected annual creation in banking | Over $140 billion |
2026 | AI in finance market size projected | Exceed $22.6 billion |
2026 | Overall, AI finance market projected growth | Over $900 billion |
2026 | EMEA region AI finance market share | Over $200 billion |
2027 | AI in banking market size expected | Exceed $27 billion |
According to precedence research, However, a specific field of AI, Generative AI, has an exponential effect on this sector. Take a look at [2]:
2023: The generative AI market in banking and finance is expected to reach $947.49 million.
2024: Market size is projected to grow to $1,260.16 million.
2025: Expected to reach $1,676.02 million.
2026: Projected to grow to $2,229.10 million.
2027: Estimated to reach $2,964.71 million.
2028: Expected market size of $3,943.06 million.
2029: Projected to reach $5,244.27 million.
2030: Expected market size of $6,974.88 million.
2031: Estimated to reach $9,276.60 million.
2032: Projected to grow to $12,337.87 million.
2033: Expected market size of $16,409.37 million.
2034: Projected to reach $21,824.46 million.
How AI is Transforming the Financial Services Sector
AI’s applications in financial services are vast and varied, from managing tasks to customer interactions. According to Deloitte’s article on democratizing financial advice for mass-market growth. Here’s a quick peek at how AI is impacting the industry [3]:
Rising Demand: The increasing need for accessible financial advice among mass-market investors, alongside mobile wallet adoption, boosts financial inclusion potential.
Market Growth: Mass retail financial wealth could nearly double to $22 trillion by 2030, offering profitable opportunities for financial firms.
Advice Gap: 59% of U.S. consumers seek financial advice but struggle to find it, often relying on digital and social media.
Robo-Advisory Advancements: Self-learning AI makes robo-advisors fully automated, efficient, and scalable for smaller portfolios.
Cost Reduction: Robo-advisors and hybrid models lower acquisition costs, allowing personalized service for lower-asset clients.
Regional Growth: Latin America will have the highest growth in mass retail assets at 13.9%, while North America and Europe will remain the largest markets by 2030.
Mobile Wallets for Accessibility: Financial firms can cut costs and expand reach by partnering with mobile wallets for integrated services.
Generational Preferences: Millennials favour robo-advisors (75%), while older clients prefer hybrid models for added trust.
AI’s Role in Major Economies
AI is reshaping the financial landscape globally. The global AI in the banking market is divided into five regions: North America, South America, Europe, Middle East & Africa, and Asia Pacific. North America leads the market due to technological advancements, fraud concerns, and strict regulations, with banks adopting AI for data-driven insights and risk management.[4]
Region | Market Share |
North America | 32% |
South America | 7% |
Europe | 24% |
Middle East & Africa | 12% |
Asia Pacific | 25% |
Asia Pacific shows the highest growth, driven by rapid economic development and digital transformation, with banks investing in AI for digital banking, chatbots, and virtual assistants to meet evolving customer needs. Here’s how AI in financial services will impact major economies:
What’s next for AI in the Financial Services Sector?
According to McKinsey’s recently published article “One year in: Lessons learned in scaling up generative AI for financial services” generative AI in financial services has shifted from exploration to scaling, with institutions now prioritizing large-scale adoption led by top executives. Centralized gen AI operations, backed by robust infrastructure and reusable frameworks, outperform decentralized setups by managing resources and scaling efficiently. [8]
AI faces both opportunities and challenges in financial services. According to research by Fortune Business Insights and Acumen Research, some challenges include regulatory hurdles, data privacy concerns, and the need for skilled AI professionals. Overcoming these challenges will be crucial for successful AI integration.[9][10]
AI-Driven Financial Services for the Future!
According to EY, Generative AI (GenAI) drives significant innovation, particularly in enhancing customer service, risk management, and capital markets. It enables banks to reimagine operations and product development for increased efficiency. [7]
Now if we talk at last in broad terms, about how AI has been impacting the financial services sector, we can say:
Efficiency: Better and streamlined processes in fraud detection and loan processing.
Risk Management: Improved credit assessments and easier fraud prevention.
Revenue Generation: Personalization of services boosts client loyalty and engagement.
Let these examples inspire you to explore how AI can revolutionize your business and increase your revenue.
So, are you ready to transform your financial strategies with AI. Let's innovate together.
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