The global business value of deploying artificial intelligence (AI) across banking and financial services will reach $300 billion by 2030, predicts business information provider IHS Markit in a report.
By contrast the business value of AI in banking during 2018 is estimated at $41.1 billion, a figure that includes the cost savings and efficiencies of introducing AI technology against keeping existing infrastructures and processes.
The study suggests that AI is becoming more commercially viable in banking, for tasks from fraud detection to helping automate processes. The business information provider makes its prediction based on a widely projected increase in the number of AI projects reportedly under development
“The innovative capabilities AI will bring to financial services will be transformative,” says Don Tait, principal analyst at IHS Markit. “AI is poised to challenge and blur our concepts of computing and the ‘natural’ human.
“This sea change will require both businesses and governments to develop expansive foresight and critical understanding of the full effects of digitisation and emerging technologies.”
Apac to take top slot
According to the report, North America is projected to be the largest market for AI in banking between 2018 and 2023. AI in the region will increase from a business value of $14.7 billion in 2018 to nearly $79 billion by 2030. However, North America’s proportional importance of is expected to decline between 2024 and 2030 as Asia Pacific, Europe and other global regions roll out more AI solutions in the banking sector.
Asia Pacific is the second largest region employing AI in banking, increasing from a business value of $11.5 billion in 2018 and will become the leading region in 2024, with a business value of $50.6 billion. By 2030, the figure for the Apac region is expected to reach $98.6 billion.
“Countries like China, Japan, South Korea, Hong Kong and Singapore are likely to drive the demand for AI within the banking sector over the next 10 years,” Tait says.
The report suggests that the introduction of AI technology is unsettling news for those employed within the banking sector, with investment accompanied by job losses and job re-assignments as AI increases enterprise productivity
IHS Markit estimates that by 2030, around 500,000 bank workers in the UK and 1.3 million in the US could be affected. If mass job losses extend across all countries globally, tens of millions of banking and financial services employees will be impacted by the introduction of AI technology in the next decade.
“Banking employees potentially impacted by the introduction of AI includes tellers, customer service reps, loan interviewers and clerks, financial managers, compliance officers and loan officers,” Tait says. “All in all, AI technology will reconfigure the financial industry’s structure, making the banking sector more humane and intelligent.”
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