AI in Credit Scoring Market Size to Reach 5,581.5 million in 2031
The AI in Credit Scoring Market size was USD 1,030.7 Million in 2023 and is expected to register a revenue CAGR of 23.7% during the forecast period
December 27th, 2024 – Growing disposable developed and developing countries is a key factor driving the market revenue growth of global AI credit scoring market. According to the Organization for Economic Co-operation and Development (OECD), the United States has the largest gross disposable income in this category, with an average of USD 54,854 in 2022. Luxembourg ranks second at USD 49,860, followed by Switzerland at USD 43,035. Australia and Germany complete the top five, with average disposable incomes of USD 42,547 and USD 42,433, respectively.
Partnerships between banks, financial services, and insurance (BFSI) and major fintech companies are expected to provide considerable prospects in the AI in Credit Scoring sector. Traditional banking, financial services, and insurance (BFSI) firms are adopting new fintech technology to improve the efficiency and accuracy of credit assessment procedures.
Companies are incorporating machine learning (ML) and artificial intelligence (AI) enabled algorithms to analyze large volume of data in real-time. For instance, on April 2023, key player in AI in credit scoring market such as Fintech Galaxy partners with Singapore based FinbotsAI to launch a high-accuracy risk assessment and real-time credit decisioning product.
Furthermore, real-time credit scoring promotes financial inclusion by allowing lenders to evaluate their customers’ credit histories. Financial institutions are rapidly employing this technology to increase sales of credit cards and instant loans. These factors are projected to drive market revenue growth over the forecast period.
However, concerns regarding data privacy and security are a major restraining factor of AI in credit scoring market. Financial institutions across globally highly depends on AI algorithms that analyze large amounts of personal and financial data. This information can be leveraged by hackers who are the selling point of identity theft, fraud, and unauthorized access to accounts, which costs individuals and companies. According to the Federal Bureau of Investigation (FBI), in 2023, the IC3 received a record number of complaints from the American individuals, exceeding 880,418 with potential losses over USD 12.5 billion.
Key Highlights:
- Software segment contributed largest share in 2023. The increasing use of artificial intelligence (AI) in credit assessment is a major contributor to the largest revenue share. AI-powered systems allow lenders to analyses both standard and alternative information when screening credit profiles. This expanded analytical capabilities enhances risk assessment and accelerates loan approvals. Sophisticated digital solutions have become crucial for financial services. AI in credit scoring allows for more personalized lending products, reduces default rates, and enhances profitability.
- Fintech segment is expected to register the fastest revenue growth over the forecasted period. consumers across the world are increasingly utilizing finance applications, as increasing internet penetration. According to the International Telecommunication Union (ITU), 67% of the world’s population, or 5.4 billion people, are presently online. This has grown by a considerable 4.7% since 2022, surpassing the 3.5% increase between 2021 and 2022.
- North America is registered the highest market share in AI in credit scoring market. The growth of fintech startups in North America has fueled competition for implementing AI into financial services offerings. Fintech businesses’ strategies encourage conventional banks to use AI technology in order to retain market share. This competitive climate drives investments in AI solutions, which results in increasing income streams for BFSI and fintech companies.
- Some major companies in the AI in credit scoring market report are including FICO, Experian PLC, Equifax Inc., TransUnion, Zest AI, Lenddo EFL, Fintech Galaxy Limited, Worth AI, Scienaptic AI, Pagaya Technologies Ltd, Rich Data Co., Credit Sesame, Aperidata Limited, FinbotsAI, and AmeriData Solutions PTE Ltd.
- On 5th September 2023, Credit Sesame launched its new AI-powered platform and user experience designed to streamline credit management and enhance financial well-being. The new platform interface, Sesame Ring, transforms how users perceive and engage with their credit entirely free of charge. This innovative interface allows everyone to view their credit in context, take charge of their credit, make informed decisions, and follow an interactive game plan to stay on course.
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Navistrat Analytics has segmented global AI in credit scoring market based on component, deployment model, end-use and region:
- Component Outlook (Revenue, USD Million; 2021-2031)
- Software
- Services
- Deployment Outlook (Revenue, USD Million; 2021-2031)
- On-premise
- Cloud
- Hybrid
- End-Use Outlook (Revenue, USD Million; 2021-2031)
- Banking, Financial Services, and Insurance (BFSI)
- Fintech
- E-Commerce
- Others
- Regional Outlook (Revenue, USD Million; 2021-2031)
- North America
- U.S.
- Canada
- Mexico
- Europe
- Germany
- France
- U.K.
- Italy
- Spain
- Benelux
- Nordic Countries
- Rest of Europe
- Asia Pacific
- China
- India
- Japan
- Singapore
- South Korea
- Oceania
- ASEAN Countries
- Rest of APAC
- Latin America
- Brazil
- Rest of LATAM
- Middle East & Africa
- GCC Countries
- South Africa
- Israel
- Turkey
- Rest of MEA
- North America