Artificial Intelligence (AI) which is demonstrated by machines is the fast-evolving technology for organizations across the world to customize experiences for individuals. The technology itself is upgrading and getting smarter day by day, allowing more and newer industries to adopt AI for various applications.
There is hardly any sector that has not grown digitally and Banking, Financial Services and Insurance (BFSI) sector is no longer, and the exception. There has been tremendous growth in the mobile and internet banking services in the BFSI sector across the world and currently, Artificial Intelligence and Machine Learning are helping each sector to grow to the next level. Currently, AI has covered around 19 countries in the banking sector and they are the US, Canada, UK, Germany, France, Spain, Sweden, Switzerland, Australia, China, India, Japan, Singapore, South Korea, Brazil, Mexico, UAE, Israel, and South Africa.
Technological Change or development is the activity of invention, innovation, and diffusion of technology. AI has become more popular today due to big data, advanced algorithms, and improvements in computing power and storage. It seems to be amazing how technology has changed our way of living. Banking, which is now one of the oldest businesses in the world is constantly evolving. It has shifted from manual services to online services, so as to keep a better record and secure transactions with just one click. It's not only helping the clients but also the banks. Today, banking is not only about the physical structure rather it's more appropriate on our fingertips, and that too 24*7.
As of 2019 the market size of AI in the BFSI sector was USD 5 Billion and is expected to grow up to 40% by the year 2026 due to the shifting preference of Indian BFSI enterprises towards machine learning algorithms for a wide range of applications including fraud detection, algorithmic trading, and anti-money laundering. AI is covering around the component, technology, end-use, and region statements for now and around 21 companies have been currently in the market usage of AI in the BFSI sector. For naming few companies Amazon web Services Inc., Digital reasoning, Google LLC, Cognitive Scale Inc., NEXT IT, Oracle Corporation, Palantir Technologies, etc.
As every coin is two-sided the same way AI is giving dual effects in the BFSI industry and so the growth drivers are that is exponentially growing the digital data, more investment in the AI sector, increase in the partnership between the financial institutions and fintech companies whereas the challenges being faced are data safety and security due to lack of cyber laws in India and black box effect.
#Black box effect refers to an artificial intelligence system whose inputs and operations are not visible to the user or another interested party. In general, basically, it is an impenetrable system.
