Chatbot in BFSI Market by Platform Type (Web-based and Mobile-based), by Component (Software and Services), by Application (Customer Support, Branding & Advertisement, Data Security & Compliances, and Others), and by End User (Banks, Insurance Companies, and Others) – Global Opportunity Analysis and Industry Forecast, 2023–2030
Industry: BFSI | Publish Date: 27-Sep-2023 | No of Pages: 343 | No. of Tables: 192 | No. of Figures: 162 | Format: PDF | Report Code : N/A
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Chatbot in BFSI Market Overview
The global Chatbot in BFSI Market size was valued at USD 890 million in 2022, and is predicted to reach USD 6170 million by 2030, with a CAGR of 27.4% from 2023 to 2030. A chatbot in BFSI refers to the segment of the financial technology (FinTech) industry that focuses on the development and provision of chatbot solutions for businesses operating within the BFSI sector. Chatbots in BFSI are typically designed to enhance customer service, streamline operations, and improve efficiency within financial and insurance institutions.
These chatbots behave as financial advisors who can perform important transactions securely. Virtually-assisted chatbots are introduced to maintain a relationship with customers. They can handle a high volume of customer inquiries, and be available around the clock for customers. This, in turn, reduces the need for human customer service representatives.
A recent survey by Tidio (a Poland-based CRM software company) found that chatbot adoption is growing rapidly across all the business sizes. Currently, 22% of micro-businesses, 20% of small businesses, 11% of medium-sized businesses, and 12% of large businesses use chatbots. However, this is expected to increase to 43%, 60%, 80%, and 71% over the coming years, respectively.
Market Dynamics and Trends
The increasing adoption of chatbots in the banking sector to manage a huge number of customer needs and services is propelling the chatbot in BFSI market growth. This growth is attributed to the fact that chatbots can perform conversational, transactional, secure, and reliable tasks across multiple regions more accurately than humans.
Also, the increasing popularity of chatbots in the financial sector drives the market growth. Financial institutions, such as Capital One, JPMorgan Chase & Co., and TD Bank, are developing their chatbots. These chatbots can perform various tasks, such as checking account balances, transaction reviews, bill payments, card services, and other banking operations.
Moreover, the rising demand for better customer relationship management (CRM) to improve customer satisfaction with faster response times and more convenient product options is boosting the market growth. Chatbots offer various benefits such as cost reduction, improved Net Promoter Score (NPS), around the clock support, and better user experience.
However, the high initial and upgradation costs that restrict small and medium-sized enterprises from integrating chatbots are restraining the growth of the global market. On the contrary, the introduction of artificial intelligence (AI) and machine learning (ML) based chatbots enables businesses to provide more personalized and accurate responses to customers. This factor is expected to create opportunities for the chatbot in BFSI market.
For instance, in June 2023, One Zero, an Israeli digital bank, announced the launch of an AI-based chatbot that can answer customer questions and complete tasks. The chatbot is based on Generative Pre-trained Transformer (GPT) technology, and is designed to be more personalized and engaging than traditional chatbots.
Market Segmentation and Scope of Study
The chatbot in BFSI market report is divided on the basis of platform type, component, application, end user, and region. On the basis of platform type, the market is bifurcated into web-based and mobile-based. On the basis of components, the market is classified into software, services, and others. Based on application, the market is segmented into customer support, branding & advertisement, data security & compliances, and others. Based on end users, the market is further categorized into banks, insurance companies, and others. Regional breakdown and analysis of each of the aforesaid segments includes regions, such as North America, Europe, Asia-Pacific, and the Rest of the World (RoW).
Geographical Analysis
North America holds the dominant share of the chatbot in BFSI market. This is attributed to the presence of prominent companies, such as Google LLC, Microsoft Corporation, Voya Financial, Inc., and others, in the region. These companies are adopting in several business strategies, including regional partnerships and collaborations.
For instance, in February 2021, Grupo Xcaret partnered with Worldline to integrate a chatbot into its online platform. This integration is aimed at providing customers with a personalized and interactive shopping experience. The chatbot can answer customer questions, make recommendations, and process payments in multiple languages.
Also, the increasing use of chatbots in developed countries, such as the U.S. and Canada, for better customer relationship management is driving demand for chatbots in the BFSI sector in this region. According to the Consumer Financial Protection Bureau (CFPB), about 37% of Americans interacted with a bank's chatbot in 2022. This figure is expected to grow in the coming years.
On the other hand, Asia-Pacific is considered the fastest-growing region, in the market is analyzed across India, China, Japan, and the rest of the Asia-Pacific region. The market is expected to grow due to the rapid adoption of advanced technologies such as automation in the well-established fintech industry in this region. According to the India Brand Equity Foundation (IBEF), India has the third-largest financial technology ecosystem globally. It significantly focuses on integrating chatbot technologies in their operation to enhance the quality of work.
Furthermore, companies are introducing new chatbots for the baking sector to improve customer relations. This factor allows companies to reduce operational costs and drive the growth of the chatbot in BFSI market. For instance, in April 2023, Japan's top banks, such as Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group, used AI chatbots to handle customer queries, enabling human representatives to focus on more complex issues. AI chatbots are increasing in the financial sector to reduce costs and improve customer service.
Competitive Landscape
The chatbot in BFSI industry, which is highly competitive and fragmented, includes several market players, including Google LLC, Microsoft Corporation, [24]7.ai, Inc., Acuvate, Aivo, Teneo.ai, Creative Virtual Ltd., IBM Corporation, Inbenta Holdings, Inc., and Verint Systems, Inc., and others. These market players are opting for various strategies, such as product launches, to maintain their dominance in the global market.
For instance, in March 2023, Google LLC launched BARD, an AI-powered chatbot that will compete with OpenAI and Microsoft in the chatbot market. SouthState Bank in the U.S. has initiated the adoption of Google’s Bard in its customer relationship management to boost productivity and knowledge sharing in banking operations.
Moreover, in March 2023, Microsoft launched Jugalbandi, a generative AI-driven multilingual chatbot that is accessible through the popular messaging platform WhatsApp. It is aimed to help people residing in villages of India have an easier access to government’s services. Microsoft explained that a user needs to send a text message or an audio message to a WhatsApp number to trigger the chatbot. It will also help farmers avail government’s financial services information.
Key Benefits
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The chatbot in BFSI market report provides a quantitative analysis of the current market and estimations from 2023 to 2030. This analysis assists in identifying the prevailing market opportunities to capitalize on.
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The study comprises an extensive analysis of the chatbot in BFSI market, including the current and future trends to depict prevalent investment pockets in the market.
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The information related to key drivers, restraints, and opportunities and their impact on the chatbot in BFSI market is provided in the report.
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The competitive analysis of the market players along with their market share in the chatbot in BFSI is provided in the report.
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The SWOT analysis and Porter’s Five Forces model are elaborated in the study.
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The value chain analysis in the market study provides a clear picture of the roles of stakeholders.
Chatbot in BFSI Market Key Segments
By Platform Type
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Web-based
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Mobile-based
By Component
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Software
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Services
By Application
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Customer Support
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Branding & Advertisement
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Data Security and Compliances
By End User
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Banks
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Insurance Companies
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Others
By Region
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North America
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The U.S.
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Canada
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Mexico
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Europe
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The U.K.
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Germany
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France
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Italy
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Spain
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Denmark
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Netherlands
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Finland
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Sweden
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Norway
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Russia
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Rest of Europe
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Asia-Pacific
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China
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Japan
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India
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South Korea
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Australia
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Indonesia
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Singapore
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Taiwan
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Thailand
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Rest of Asia-Pacific
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Rest of the World (RoW)
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Latin America
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Middle East
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Africa
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Report Scope and Segmentation
|
Parameters |
Details |
|
Market Size in 2022 |
USD 890 million |
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Revenue Forecast in 2030 |
USD 6170 million |
|
Growth Rate |
CAGR of 27.4% from 2023 to 2030 |
|
Analysis Period |
2022–2030 |
|
Base Year Considered |
2022 |
|
Forecast Period |
2023–2030 |
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Market Size Estimation |
Million (USD) |
|
Growth Factors |
Growing utilization of chatbots in the banking industry The increasing popularity of chatbots in the financial sector Rising demand for better Customer Relationship Management (CRM) to improve customer satisfaction |
|
Countries Covered |
28 |
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Companies Profiled |
10 |
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Market Share |
Available for 10 companies |
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Customization Scope |
Free customization (equivalent to up to 80 working hours of analysts) after purchase. Addition or alteration to country, regional, and segment scope. |
|
Pricing and Purchase Options |
Avail customized purchase options to meet your exact research needs. |
Key Players
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Google LLC
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Microsoft Corporation
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[24]7.ai, Inc
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Acuvate
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Aivo
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Teneo.ai
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Creative Virtual
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IBM Corporation
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Inbenta Holdings, Inc.
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Verint Systems, Inc.
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