Whether it’s detecting fraud or helping automate processes, there’s no denying AI has become more commercially viable in banking; so much so, the global business information provider IHS Markit, predict that the business value of AI in banking will reach $300bn by 2030.
In 2018, the business value of AI was estimated to be $41.1bn, which includes the cost savings and efficiencies of introducing AI technology compared to keeping existing infrastructures and processes.
“The innovative capabilities AI will bring to financial services will be transformative,” said 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 digitization and emerging technologies.”
How technology is impacting the finance and banking sector
According to Artificial Intelligence in Banking Report by IHS Markit, North America is tipped to be the biggest market for AI in banking between 2018 and 2023. The business value of AI in this region will go from $14.7bn in 2018 to nearly $79bn by 2030. However, the proportional importance of the North American region is likely 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, with a business value of $11.5bn in 2018. However, by 2024, IHS predicts it will become the leading region using AI in banking, with a business value of $50.6bn. By 2030, the Asia Pacific region for AI in banking is projected to reach $98.6bn by 2030.
“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 ten years,” added Tait.
Technology predictions for the banking sector in 2019
It’s not all good news: job losses and re-assignments will be common, IHS Markit estimates that by 2030, around 500,000 bank workers in the United Kingdom and 1.3m in the United States could be affected.
If this is mirrored across all countries globally, then there will be tens of millions of banking and financial services jobs impacted by the introduction of AI technology in the coming 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 said. “All in all, AI technology will reconfigure the financial industry’s structure, making the banking sector more humane and intelligent.”