Estimated reading time: 2 minutes, 47 seconds

Generative AI to Make Massive Impact in Fintech Space: Report

There is little doubt generative artificial intelligence (AI) technology is poised to substantially impact major segments of both consumer and producer markets in nearly every economic region; and pinpointing the scope of that impact has generated much spilled ink in recent months.

To that end, a new report from Market.us indicates the next decade is going to yield a staggering explosion of generative AI growth in the fintech space. Per the report, that market is expected to reach $6.256 billion by 2032 at a compound annual growth rate of 22.5%. To put the figure in perspective, the generative AI fintech market was $865 million last year.

“Generative AI has boosted the tech industry by permitting companies to automate complex processes. The major reason for the evolution of machine learning is cost reduction, reduced human errors, improved customer experience, and improved efficiency,” reads the report.

These considerations, notes the report’s authors, would be especially empowering for smaller finance companies looking to compete with larger ones by boosting productivity and reducing mistakes through automation born of generative AI technology.  

From Twitter

Science Is Strategic @scienceisstrat1 ·Mar 30

"Great clip from @chamath describing who the ultimate financial winners may be from the generative AI revolution https://twitter.com/i/status/1641529957976252437"

Additionally, a separate research report from Goldman Sachs indicates this generative AI revolution may come at a cost, though, at least in the short term. The investment and financial services giant projects fully 300 million full-time jobs worldwide could be lost to AI-driven automation. “If generative AI delivers on its promised capabilities, the labor market could face significant disruption. Using data on occupational tasks in both the US and Europe, we find that roughly two-thirds of current jobs are exposed to some degree of AI automation, and that generative AI could substitute up to one-fourth of current work,” reads the Goldman Sachs report.

The research report also notes, though, at least some portion of displaced workers will find new vocations born of generative AI’s emergence. Historically, automation-driven worker displacement has not only been mitigated by the underlying technology but often accounts for “the vast majority of long-run employment growth.”

“The combination of significant labor cost savings, new job creation, and higher productivity for non-displaced workers raises the possibility of a productivity boom that raises economic growth substantially, although the timing of such a boom is hard to predict,” it adds.

Overall, the boost in labor productivity could help yield an annual GDP spike of as much as 7% projects Goldman Sachs.

From Twitter

Derek Thompson @DKThomp ·Mar 28

"There are a lot of predictions coming out about how many jobs will be transformed/displaced by AI. Here’s a strongly held prediction: Generative AI will waste time before it saves time. It’s a consumer technology first, 'producer technology' later."

The coming years will not be without challenges, too, as the market.us report identified some areas that might falter in the earliest stages of generative AI adoption. For example, loan decisions rooted in generative AI, privacy and compliance with a rapidly changing regulatory landscape could be difficult to navigate. “The biggest challenge faced by the majority of fintech companies with generative artificial intelligence is the sensitive issue of data security and privacy. The fintech industry is governed by strict rules and regulations since any security and data breach failure could be destructive,” it reads.

Read 582 times
Rate this item
(0 votes)

Visit other PMG Sites:

PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.