Generative AI in Financial Services Market: Top 10 Applications

Generative AI (Generic Artificial Intelligence, or GAI for short) is an artificial intelligence technique that creates new data — such as text, images or code - via artificial neural networks (ANNs). Generative AI has proven an invaluable asset to financial services firms looking to improve various processes including fraud detection, risk management, forecasting and customer service.

As per Market.us Survey, The Generative Ai In Financial Services Market recorded a valuation of USD 847.3 Mn in 2022 and is expected to reach USD 9,475.5 Mn by the end of 2032, expanding at a CAGR of 28.1% over the decade, as per the latest Tech market research report (Market.us).

Here are the top 10 applications of generative AI in the financial services market:

1. Fraud Detection: Generative AI can create synthetic data similar to real-world information that is then used for training machine learning models that detect fraudulent transactions more efficiently than traditional approaches which rely solely on historical records.
2. Risk management: Generative AI can provide financial services companies with a powerful way of simulating various economic conditions and helping assess any associated risks when planning investment strategies.
3. Forecasting: Generative AI can provide investors with useful data regarding future market trends that can assist them in making more informed decisions regarding how and where to allocate their capital.
4. Customer Service: Generative AI can create tailored financial content tailored to an individual customer’s financial goals and risk tolerance.
5. Portfolio management: Generative AI technology can be leveraged to generate custom portfolios tailored specifically to an investor’s risk tolerance and investment goals.
6. Compliance: Generative AI can be leveraged to detect and prevent compliance violations within financial services companies to help avoid fines or penalties that would otherwise incur fines and penalties.
7. Regulatory reporting: Generative AI technology can be utilized to automate regulatory reporting for financial services companies, saving both time and resources in this process.
8. Market Research: Generative AI can be utilized as part of market research to assist financial services firms with identifying new opportunities and threats within their sectors.
9. Product Development: Generative AI can be utilized by financial services firms to develop innovative financial products, helping them stay ahead of competitors.
10. Marketing: Generative AI allows businesses to develop tailored marketing campaigns suited to each of their customer’s individual interests and requirements.

Here are a few challenges faced by generative AI-powered financial services markets:

1. Lack of Qualified Professionals: With so few professionals capable of creating and deploying AI solutions quickly enough for market growth to occur effectively, shortages pose an obstacle that prevents it.
2. High Cost of Implementation: Generative AI solutions may be costly to implement, which presents some financial services companies with an obstacle.
3. Privacy Concerns: There are privacy concerns about the use of generative AI in financial services. Some people are concerned that generative AI could be used to create fake financial documents or to track people’s financial transactions without their knowledge.