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AI Applications in Fintech Expected to Surge Through 2027: Study

The global market for artificial intelligence-based fintech applications is expected to skyrocket to more than $34 billion by 2027, according to a new forecast from AllTheResearch.

artificial intelligence 3382521 1920According to the research firm, that market was around $8 billion in 2020, and the anticipated leap to $34 billion would represent a compound annual growth rate of 23.5%.

“Artificial Intelligence in fintech is allowing organizations to reduce their cost, automate their procedure[s] and decrease the possibilities of mistakes,” according to AllTheResearch. “AI chatbots are utilized by organizations as customer assistants for numerous functions which include sales, customer care executive (over-the-phone), and online chat executive.”

Further, the study indicates small finance organizations will be especially positioned to continue to be empowered through cheap, affordable solutions and deliver reliable, low-error work thanks to the technological value of artificial intelligence.

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“Moreover, the insightful information about the cash flow, earnings, and expense is gaining traction from the end-user as this enables organizations to reduce their expenses, proliferating the demand for AI in fintech,” adds the research firm.

According to information from Finextra, some of the key areas where artificial intelligence is expected to have the biggest impact include process optimization, credit scoring, customer service, security and robo-advisory applications. “In 2021, we are set to see a continuation of on-demand [services] in the financial industry. What this means is customers are expecting services to be delivered faster and more personalized than ever before,” notes the informational resource.

Further, the impact of the artificial intelligence market appears to be regionally broad. While expected to grow in a diverse array of markets, it is expected to see the most growth in North America, says AllTheResearch.

The locations anticipated to enjoy particularly robust growth are as follows:

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa

“In terms of geography, North America is expected to hold the largest market share during the forecast period owing to the presence of AI software and system suppliers in the region,” notes AllTheReseach. “Moreover, the high expenditure by private and public organizations for the development of the market and growth in the research and development activities contributed to the growth of the AI in fintech … in the region.”

Of course, like any emerging technology, there are always obstacles and challenges that adoptees must overcome. For example, as Finextra notes, some banks have flagged non-fraudulent transactions and there have been a multitude of false positives and system-wide bugs that have hampered the space.

“However, that said, they are being ironed out. As technology advances, [artificial intelligence] and [machine learning] will become smarter and more adapted to human behavior, allowing them to deliver more accurate results,” it adds.

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