Surging Adoption Of Machine Learning And AI To Strengthen Credit Risk Assessment Market Growth Over The Coming Decade

Credit Risk Assessment Market


The Credit Risk Assessment Market is estimated to be valued at US$ 7.31 Bn in 2023 and is expected to exhibit a CAGR of 12.4% over the forecast period 2023 - 2030, as highlighted in a new report published by Coherent Market Insights.


Market Overview:
The credit risk assessment market caters to the banking and financial services industry by providing solutions that help evaluate risks associated with giving loans and credit to individuals and businesses. Products in this market deploy statistical and mathematical techniques to analyze financial and non-financial parameters of customers to assess default risk.

Market Dynamics:
The rising adoption of machine learning and artificial intelligence across the banking sector is a major driver for the credit risk assessment market. Machine learning algorithms can learn from large credit data sets and help banks more accurately measure risk while also expanding credit access. Another driver is the growing need for automated, real-time risk analysis. Credit risk assessment solutions help banks dynamically analyze evolving customer profiles and detect early warning signals of delinquencies. This enables timely interventions and better management of non-performing assets.

Market Key trends:
One of the key trends in the credit risk assessment market is the growing adoption of AI and machine learning technologies. AI and machine learning are enabling credit risk assessment tools to analyze large amounts of customer data, including financial transactions, payment histories, social media behaviours, etc. to assess creditworthiness more accurately. These technologies can detect complex patterns in data and make more informed decisions. This has significantly improved the risk assessment capabilities of firms.

SWOT Analysis:
Strengths: Credit risk assessment tools offer advantages like more objective decisions, faster turnaround times, ability to analyze large customer data.
Weaknesses: Over-reliance on models can miss out certain customer-specific factors. Data quality and privacy issues also remain a challenge.
Opportunities: Growing financial inclusion in developing markets, open banking bringing more alternative data sources.
Threats: Stringent regulations around data privacy, increasing customer awareness around data usage can hamper access to customer data.

Key Takeaways:
Global Credit Risk Assessment Market Demand is expected to witness high growth, exhibiting CAGR of 12.4% over the forecast period 2023 - 2030, due to increasing financial inclusion and digital lending activities worldwide.

The US dominates currently due to large digital lending volumes and widespread adoption of advanced analytics. However, China and India are expected to be the fastest growing markets owing to their large population, increasing internet and smartphone penetration, and rapid growth of fintech companies.

Key players operating in the credit risk assessment market include Experian, Equifax, TransUnion, FICO, Moody's Analytics, Oracle, IBM, SAP, SAS Institute, Fiserv, Pegasystems, Genpact, ACL, Kroll, Riskonnect, RiskSpotter, Riskdata, BRASS, Misys. Major players are focusing on partnerships, mergers and acquisitions to expand their risk assessment capabilities and gain access to newer sources of customer data.

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