The global surge in the adoption of AI technologies in the banking, financial services, and insurance (BFSI) sector has increased the demand for explainable AI. This led to the expansion and implementation of XAI techniques, methodologies, and tools in several financial institutions. 

According to a new research report by Next Move Strategy Consulting, the global Explainable AI Market was valued at USD 5.10 billion in 2022 and is expected to reach USD 24.58 billion by 2030, with a CAGR of 21.5% during the forecast period, 2023–2030.

The rising cyber-attack cases across various sectors, including healthcare, BFSI, and the public, have significantly boosted the demand for XAI solutions. The growing digitization of healthcare systems and the interconnectedness of medical devices have raised mounting concerns about cyber-attacks. For instance, Shields Health Care Group, a reputable medical imaging service provider based in Massachusetts, disclosed a cybersecurity breach in March 2022. This breach resulted in the theft of sensitive data belonging to more than two million patients.

Moreover, the BFSI industry has recognized the potential of AI in revolutionizing various aspects of its operations, such as customer service, risk assessment, fraud detection, and personalized financial recommendations. However, AI-powered systems that lack transparency and interpretability can undermine customer confidence. XAI helps build trust by explaining AI decisions, as customers can understand and validate the reasoning behind recommendations, loan approvals, or risk assessments.

In addition, the surge of Industry 4.0, characterized by the convergence of advanced technologies and digital transformation across different industries, is pivotal in propelling the demand for XAI. As per the collaborative survey conducted by the World Economic Forum and McKinsey in June 2022, 103 sites across the globe emerged as lighthouses of Industry 4.0. These companies have successfully transformed their factories by embracing digital technologies. Through Industry 4.0, these organizations have become more agile and customer-focused than before by leveraging digital tools to enhance their operations.

On the contrary, as AI technologies become increasingly prevalent, there is a pressing need for skilled professionals who possess the expertise to build, deploy, and oversee AI systems that are ethical and reliable. However, the scarcity of individuals equipped with the essential knowledge and training in data ethics, bias mitigation, transparency, and interpretability presents a significant obstacle. Without the necessary skills and training, there is a risk of developing AI models that are biased, uninterpretable, or lack transparency, undermining trust and hindering the wider adoption of XAI solutions.

However, government regulatory requirements are expected to be a significant factor that provides opportunities for the explainable AI industry shortly. As governments and regulatory bodies become more focused on the responsible and ethical deployment of AI, they are likely to introduce regulations that mandate transparency and interpretability in AI systems. Regulations may require organizations to provide explanations and justifications for AI-based decisions, especially in sectors such as finance, healthcare, and legal. These regulatory requirements will create opportunities to deploy explainable AI solutions as businesses and organizations seek to comply with the regulations and ensure transparency in their AI-driven decision-making processes.

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According to the report, leading players operating in the explainable AI market include IBM Corporation, Alphabet, Inc. (Google), Microsoft Corporation, Intel Corporation, SAS, C3 AI, Equifax, FICO, Salesforce, and H2O.ai.

Key Insights from the Explainable AI Market Report:

• The information related to key drivers, restraints, and opportunities and their impact on the explainable AI market is provided in the report.

• The value chain analysis in the market study provides a clear picture of the role of each stakeholder.

• The market share of the players in the global explainable AI market along with their competitive analysis are provided in the report.

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