LONDON – The increasing demand for artificial intelligence (AI) in financial services is an emerging trend in the financial services market. AI is used to find efficiency gains, investments, and other financial elements within financial services companies. For instance, in November 2020, Roberto Nicastro and Federico Sforza, have launched Aidexa, a new Italian challenger bank. A simple, AI-powered and data-driven bank; with its new brand combining ‘AI’ and ‘Idea’ into a fintech company that addresses small and medium enterprises (SME) needs with simple, quality, smooth UX and swift solutions, leveraging on machine learning technology and the opportunities of PSD2/open banking.
The global financial services market size is expected to grow from $23.31 trillion in 2021 to $25.83 trillion in 2022 at a compound annual growth rate (CAGR) of 10.8%. The global financial services industry size is then expected to grow to $37.34 trillion in 2026 at a CAGR of 9.6%.
Blockchain Technology Is The Main Driving Factor For The Financial Services Market
Major companies operating in the banking and financial services industry are adopting the use of blockchain to help reduce fraudulent transactions, such as the use of smart contracts which allow the buyer and seller to create if / then contracts in which one step of the process won’t be fulfilled until the one before it has been verified completely. Blockchain also helps verify the legitimacy of every part of the supply chain process and blockchain provides security through its non-repudiation and disintermediation of data storage which helps prevent misappropriating company assets.
Rising Interest Rates Can Pose A Limitation To The Financial Services Market Growth
Interest rates globally are forecasted to rise in most of the developing and developed economies, during the forecast period. Most countries across the world are raising interest rates to control inflation and also to limit the flow of capital out of the country. These factors are expected to have a negative impact on the financial services industry as borrowing money becomes expensive, thus limiting the growth of the financial services industry.
Allianz Held The Largest Share Of The Financial Services Market In 2021
Allianz was the largest competitor in the financial services industry in 2021, with a 0.71% share of the market. Allianz’ strategy is focused is to transforming their organization to become simple, digital, and scalable and to rebalance its portfolio towards growth markets and new risk pools. For instance, in May 2021, Allianz became the majority shareholder in Jubilee General Insurance Limited in Kenya.
Source: The Business Research Company
