The financial services industry is growing at a very fast pace with a five-year CAGR of 20.5% and three use cases that are growing well above the average rate.
Worldwide spending on Digital Transformation (DX) is forecast to reach almost $4 trillion in 2027, according to the latest update to the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide. With artificial intelligence (AI) and Generative AI pushing investments, the DX market is forecast to grow with a compound annual growth rate (CAGR) of 16.2% over the 2022-2027 period. As organizations continue to prioritize digitalization, DX investments are projected to grow substantially, potentially reaching or even surpassing two thirds of all Information and Communication Technology (ICT) spending by 2027.
"Digital transformation is no longer a discretionary investment: companies that want to be competitive and win in the digital economy are leading the way," said Angela Vacca, senior research manager with IDC's Data & Analytics Group. "Today, DX spending represents a bigger market compared to the non-DX portion of ICT spend. And digital business investments are ramping up even faster with the advent of Generative AI which is having an impact across industries; still, opportunities are varied across different market spaces."
The financial services industry is growing at a very fast pace with a five-year CAGR of 20.5% and three use cases that are growing well above the average rate. Robotic Process Automation-Based Claims Processing is the fastest growing use case with a CAGR of 35.1%, followed by Real-time Financial Advice (29.5%) and Digital Banking Experience (29.3%). These use cases have something in common: all three are highly data intensive and rely heavily on AI, generative AI, and data and analytics technologies. The huge advances that financial institutions are employing are transforming their organizations into more effective, more customer-centric organizations that can respond more rapidly to changing customer demand and to a fast-moving macro-economic environment.
The industry that will see the largest DX investments over the 2022-2027 forecast period is Discrete Manufacturing with worldwide spending of almost half a trillion dollars in 2024. This spending will grow to more than $700 billion dollars in 2027 with Omni-Experience Engagement and Sustainability being the strategic priorities that are growing at the fastest pace among discrete manufacturing companies.
"China is entering an era where AI is omnipresent in the digital transformation of business. Supported by various digital-friendly policies, Chinese companies are concentrating on new forms of productivity, leveraging cutting-edge technologies to drive industrial advancement, intelligence, and sustainability," said Jing Qian, market analyst with IDC's Data & Analytics Group China.
"The rise of Gen AI presents both challenges and opportunities for organizations. As digital investments become dominant, it is crucial for organizations to partner with vendors who can provide guidance on resource allocation and effective digital transformation strategies. To stay competitive and innovative, it is essential to harness its potential benefits and avoid missing out on opportunities due to uncertainty," said Mariya Yahnyuk, research analyst with IDC's Data & Analytics Group.
