Banking Will Drive Cognitive and AI Systems Spending in Western Europe

Cognitive/Artificial Intelligence (AI) Systems spending will reach $3.0 billion in Western Europe in 2018, a 43% increase over 2017, according to IDC.

AI capabilities are expanding quickly, and use cases such as fraud analysis, sales process recommendation, and IT automation will drive Cognitive/AI Systems spending. Both the private and public sectors are looking at AI to streamline processes and enhance customer and citizen experience. As a result, Western European Cognitive/AI Systems spending is poised to ramp up even further, reaching $10.8 billion by 2022, a 39% five-year CAGR.

Banking will be investing the most on AI in 2018, followed by retail and discrete manufacturing. These three industries together will represent 42% of the overall Cognitive/AI Systems spending in Western Europe. Investments in finance are remarkable as AI allows companies to detect illicit acts on customer accounts and distinguish genuine from fraudulent transactions, which might cause reputational damage and significant financial losses.

By 2022, retail will surpass banking, with investments on AI approaching $1.8 billion. Retailers are looking at AI with interest, especially with the increasing deployment of automated customer service agents, chatbots, and virtual assistants. Providing customer service via learning programs that understand customer needs will allow retailers to reduce costs on human labor, while providing online support to shoppers.

Looking at the 2017-2022 CAGR, healthcare stands out with a very strong double-digit five-year growth. AI advancements in healthcare are leading to important breakthroughs in improving patient care models, in early detection and treatment of diseases, in diagnosis, and in medical research. AI is helping doctors automate diagnosis by extracting insight from a patient data to facilitate decisions and personalize treatments.

"AI is one of the most disruptive technologies we are witnessing and is a key enabler to promote digital transformation," said Andrea Minonne, research analyst, IDC Customer Insight and Analysis. "Banking, retail, and manufacturing are the biggest spenders, but healthcare is also set to experience rapid growth of AI investments. Thanks to its high-speed processing and learning capabilities, AI is a great technology to fulfill tasks that take humans longer to carry out, without compromising the accuracy of outcomes.