The predictive analytics in banking market is poised for significant growth in the coming years, with a projected compound annual growth rate (CAGR) of 20.1% from 2022 to 2030. This market, valued at US$ 1.9 billion in 2021, is expected to reach US$ 9.91 billion by 2030.
Predictive analytics technology plays a crucial role in the banking industry, offering valuable insights into customer behavior and preferences. It enables financial institutions to deliver personalized experiences and assists in risk assessment, regulatory compliance, and customer relationship management. Moreover, credit card companies can leverage predictive analytics to determine credit limits, while insurance firms can use it to set premium levels.
What Drives Market Growth?
Several factors contribute to the growth of the predictive analytics in banking market. The increasing prevalence of Internet of Things (IoT) devices worldwide has led to a rise in fraud activities such as money laundering and financial fraud. To combat these threats, the adoption of predictive analytics becomes essential.
The demand for predictive analytics is also fueled by the growing usage of artificial intelligence (AI) in mobile banking applications and the rising awareness among consumers about its benefits. Developed economies, in particular, drive the demand, along with the expansion of global banking predictive analytics.
COVID-19 Impact and Regional Outlook
The COVID-19 pandemic has had a profound impact on various industries, including banking. As fraud cases increased during the pandemic, financial institutions had to adopt preventive measures, making predictive analytics more crucial than ever. Additionally, the digitization drive during the global health crisis led to a surge in the use of IoT devices, further boosting the adoption of predictive analytics in banking.
In terms of regional outlook, North America is expected to dominate the predictive analytics in banking market. The region’s advanced technology adoption and strict regulatory environment drive the demand for predictive analytics, ensuring data security. The Asia-Pacific region also promises significant growth due to increased awareness and the presence of numerous banking institutions.
Frequently Asked Questions (FAQ)
Q: What is predictive analytics in banking?
A: Predictive analytics is a technology used in the banking industry to gain insights into customer behavior and preferences.
Q: How can predictive analytics benefit banks?
A: Predictive analytics helps banks deliver personalized experiences, assess risks, manage regulatory compliance, and improve customer relationship management.
Q: What factors are driving the growth of the predictive analytics in banking market?
A: The growth is driven by the increasing prevalence of fraud activities, the usage of AI in mobile banking, rising consumer awareness, and demand from developed economies.
Q: How did the COVID-19 pandemic impact the predictive analytics in banking market?
A: The pandemic increased the need for fraud prevention measures and accelerated digitalization, leading to a surge in the adoption of predictive analytics.
Q: Which region is expected to dominate the predictive analytics in banking market?
A: North America is forecast to dominate the market, followed by the Asia-Pacific region.
As the predictive analytics in banking market continues to evolve, financial institutions have a unique opportunity to unlock value beyond growth. By harnessing the power of predictive analytics, banks can better understand their customers, mitigate risks, and deliver personalized experiences in an increasingly digital world.