NEW DELHI (India CSR): Generative Artificial Intelligence (GenAI) is set to revolutionize India’s financial services sector, significantly enhancing productivity, customer experience, and operational efficiency. A new report by EY India, titled “How Much Productivity Can GenAI Unlock in India? The AIdea of India: 2025”, predicts that GenAI could increase productivity in Indian financial services by 34-38% by 2030, with banking operations witnessing a surge of up to 46%.

GenAI Adoption is Accelerating in Financial Services

The report is based on insights from over 125 C-suite executives across multiple industries, including financial services, retail, healthcare, media, entertainment, technology, automotive, and energy. It highlights that Indian financial firms are rapidly adopting AI-powered automation, with many already seeing tangible benefits.

Key findings from the report reveal:

74% of financial institutions have initiated proof-of-concept (PoC) projects to test GenAI applications.
11% of firms have advanced to full-scale production-level deployments.
42% of organizations have started actively allocating budgets toward GenAI initiatives.

Where is GenAI Creating the Biggest Impact?

The financial services industry is integrating GenAI-driven solutions across various functions, with customer service being the primary area of focus. The study found that:

68% of firms are prioritizing GenAI for customer service enhancement.
47% are leveraging AI for operations and workflow automation.
32% are implementing GenAI in underwriting and risk assessment.
26% use AI-driven insights to boost sales strategies.
21% have started deploying GenAI for IT automation and security.

These AI-powered solutions are already delivering measurable benefits to financial institutions. According to the report, 63% of companies report higher customer satisfaction, while 58% have seen a reduction in operational costs.

Banking Operations to See the Most Significant Gains

Banking operations stand to gain the most from GenAI-driven efficiency improvements. The automation of routine banking processes, such as loan approvals, customer interactions, credit analysis, and compliance management, is expected to drastically reduce processing time and costs.

According to Pratik Shah, Partner & National Leader – Financial Services, EY India,

“The financial services industry has moved beyond experimental AI pilots to real-world implementation in 2024-25. Banks are integrating GenAI with core systems like CRM, loan origination platforms, and card management solutions, leading to faster transactions and streamlined processes.”

Additionally, AI-driven automation is bringing cost efficiencies. The report indicates that AI-powered solutions have cut operational costs by up to 90%, reducing the cost per unit of banking transactions to just 1/10th of traditional manual processes.

How Will GenAI Shape the Future of Finance?

The EY study analyzed over 700 roles in the financial services sector—300 in banking and 400 in insurance—and found that GenAI will be a key driver of future growth. Some of the expected transformations include:

Faster and more accurate credit assessments, reducing default risks.
AI-powered chatbots and voice assistants offering 24/7 customer support.
Automated underwriting and claims processing in the insurance sector.
Fraud detection and risk management through AI-powered predictive analytics.
Enhanced regulatory compliance using AI-driven monitoring systems.

The Road Ahead for AI in Banking

With AI budgets expanding, financial institutions are expected to scale up their AI investments in the coming years. However, data privacy, ethical AI deployment, and regulatory frameworks will be critical factors that shape the long-term adoption of GenAI-driven banking solutions.

As AI technology matures, banks and financial firms that successfully embrace AI-driven transformation will gain a competitive advantage, ensuring faster, more secure, and customer-friendly financial services.

(India CSR)