AI in Asset Management Market Size to Surpass USD 33.25 Bn by 2033

June 28, 2024 Prathamesh

The global AI in asset management market size is expected to increase USD 33.25 billion by 2033 from USD 3.71 billion in 2023 with a CAGR of 24.52% between 2024 and 2033.

Key Points

The North America AI in asset management market size reached USD 1.89 billion in 2023 and is expected to attain around USD 17.12 billion by 2033, poised to grow at a CAGR of 24.65% between 2024 and 2033.
North America dominated the market with the largest revenue share of 51% in 2023.
Asia Pacific is anticipated to showcase significant growth with the fastest CAGR in the market in the upcoming period.
By technology, the machine learning segment has contributed more than 67% of revenue share in 2023.
By technology, the NLP-natural language processing segment will grow at the fastest rate in the market over the forecast period.
By application, the portfolio optimization segment has held a major revenue share of 28% in 2023.
By application, the data analysis segment is predicted to witness prominent growth in the market over the forecasted period.
By deployment mode, the on-premises segment has generated more than 56% of revenue share in 2023.
By deployment mode, the cloud segment is anticipated to show the fastest growth in the market over the foreseeable period.

The AI in Asset Management Market is witnessing rapid growth driven by advancements in artificial intelligence technologies. AI is transforming traditional asset management practices by enabling predictive analytics, automation of routine tasks, and enhanced decision-making capabilities.

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List of Contents

Growth Factors

Key growth factors include increasing adoption of AI-powered algorithms for portfolio management, rising demand for personalized investment solutions, and the need for cost efficiency in asset management operations. Additionally, regulatory pressures and the quest for better risk management are driving AI adoption in this sector.

AI in Asset Management Market Trends

Increased Adoption of Machine Learning: Asset management firms are increasingly leveraging machine learning algorithms to analyze large volumes of data and improve investment decision-making processes. These algorithms can identify patterns, predict market movements, and optimize portfolio management strategies.
Integration of Natural Language Processing (NLP): NLP technology is being used to extract insights from unstructured data sources such as news articles, social media feeds, and analyst reports. This helps asset managers stay informed about market sentiment and emerging trends.
Rise of Robo-Advisors: Robo-advisory platforms powered by AI are gaining popularity, especially among retail investors. These platforms use algorithms to provide personalized investment advice, asset allocation recommendations, and automated portfolio management services.
Enhanced Risk Management: AI-driven risk management solutions are improving the accuracy of risk assessment and mitigation strategies. Asset managers can identify potential risks in real-time and adjust their investment strategies accordingly, minimizing portfolio volatility.
Focus on Regulatory Compliance: AI technologies are being employed to streamline regulatory compliance processes. Asset managers can use AI-powered tools to ensure adherence to complex regulatory frameworks and mitigate compliance risks effectively.
Expansion of Alternative Data Sources: AI is enabling asset managers to incorporate alternative data sources (e.g., satellite imagery, IoT sensor data) into their investment analysis. This helps in gaining unique insights and generating alpha in competitive markets.

Region Insights:

North America leads the AI in Asset Management Market, primarily due to the presence of major financial hubs and technological innovation centers. Europe follows closely, spurred by regulatory support and increasing investments in fintech solutions. Emerging markets in Asia-Pacific are also adopting AI in asset management, driven by rapid digitalization and growing investor base.

AI in Asset Management Market Scope

Report Coverage	Details
Market Size by 2033	USD 33.25 Billion
Market Size in 2023	USD 3.71 Billion
Market Size in 2024	USD 4.62 Billion
Market Growth Rate from 2024 to 2033	CAGR of 24.52%
Largest Market	North America
Base Year	2023
Forecast Period	2024 to 2033
Segments Covered	Technology, Deployment Mode, Application, and Regions
Regions Covered	North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa

AI in Asset Management Market Dynamics

Drivers:

The primary drivers include AI’s ability to analyze large datasets quickly, improve decision accuracy, and optimize investment strategies in real-time. Moreover, AI-driven algorithms can identify emerging market trends and risks, enhancing portfolio performance and investor satisfaction.

Opportunities:

Opportunities abound in AI-driven asset management for firms offering scalable AI solutions, predictive analytics tools, and customized investment strategies. Expansion into untapped markets, such as wealth management for mass affluent segments, presents significant growth opportunities.

Challenges:

Key challenges include data privacy concerns, regulatory compliance complexities, and the integration of AI with existing legacy systems. Moreover, the need for skilled AI talent and managing algorithm biases remain critical challenges in harnessing AI’s full potential in asset management.

AI in Asset Management Market Companies

Amazon Web Services, Inc.
BlackRock, Inc.
CapitalG
Charles Schwab & Co., Inc
Genpact
Infosys Limited
International Business Machines Corporation
IPsoft Inc.
Lexalytics
Microsoft
TABLEAU SOFTWARE, LLC
Next IT Corp.
S&P Global
Salesforce, Inc.

Recent Developments

In February 2023, Arcadis, a leading organization for natural and built assets, started a collaboration with digital technology provider Niricson. Niricson works in using robotics, computer vision, and acoustic technology combined with AI to provide predictive asset management and condition assessments for bridges and other concrete infrastructure.
In March 2022, Energy technology company Baker Hughes collaborated with C3 AI, Accenture, and Microsoft on industrial asset management (IAM) solutions for clients in the energy and industrial sectors. This collaboration improves the safety, efficiency, and emissions profile of industrial machines, field equipment, and other assets.

Segments Covered in the Report

By Technology