TLDR: A recent report by EY India, also referenced by the Reserve Bank of India, projects that Generative Artificial Intelligence (GenAI) could significantly enhance the efficiency of India’s banking operations by up to 46% by the year 2030. This transformation is driven by GenAI’s ability to streamline processes, improve customer engagement, and reduce operational costs across the financial sector.
Generative Artificial Intelligence (GenAI) is set to usher in a new era of efficiency for the Indian banking sector, with projections indicating a potential productivity leap of nearly 46% by 2030. This significant forecast comes from a comprehensive EY India report titled ‘How much productivity can GenAI unlock in India? The AIdea of India: 2025’, which has also been referenced in assessments by the Reserve Bank of India (RBI).
The report highlights that while GenAI could boost overall Indian financial services productivity by 34% to 38% by 2030, banking operations specifically stand to gain the most, with an estimated 46% improvement. This transformative impact is attributed to GenAI’s capacity to enhance customer understanding, optimize operational workflows, and deliver highly personalized services at scale.
Financial institutions are rapidly adopting AI-driven solutions to meet diverse needs, including improving customer experience, boosting employee productivity, increasing revenue, cutting costs, ensuring compliance, and fostering innovation. GenAI is emerging as a game-changer by leveraging advanced analytics to interpret customer behavior, strengthen risk management frameworks, and streamline expenses. A notable application includes AI-powered alternative credit scoring models, which are expanding access to credit for populations underserved by conventional banking systems, utilizing non-traditional data sources such as utility payments, mobile usage, GST records, and e-commerce transactions.
The adoption momentum is strong within the sector. The EY study, which surveyed over 125 C-suite executives, reveals that 74% of financial firms have already initiated GenAI proof-of-concept projects, with 11% having moved to full-scale production deployments. Furthermore, 42% of organizations are actively allocating budgets towards AI initiatives. Customer service remains the top priority for GenAI implementation among 68% of firms, followed by operations (47%), underwriting (32%), sales (26%), and IT (21%).
Early results are promising, with 63% of financial firms reporting improved customer satisfaction levels and 58% noting significant cost reductions. Pratik Shah, Partner and National Leader – Financial Services at EY India, emphasized that the industry has progressed beyond mere experimentation to real-world implementation in 2024-25. He stated, ‘Firms are integrating GenAI with core banking systems, including CRM, loan origination, and card management platforms, among other areas. These efforts have led to a significant reduction in operational costs, with AI-driven solutions slashing the cost per unit of normal business activities to as low as 1/10th of traditional manual processes.’
Also Read:
- Generative AI Boosts Financial Sector Productivity by 20%, Adoption Slowed by Regulatory Concerns
- Financial Sector Accelerates AI Adoption with Agentic Tools Gaining Significant Traction
Globally, the use of AI in financial services is expanding rapidly. The generative AI market is projected to exceed Rs 1.02 lakh crore (approximately $12 billion) by 2033, demonstrating an impressive annual growth rate of 28–34%. When deployed responsibly, GenAI is expected to make banking more inclusive, efficient, and customer-centric, thereby fueling long-term growth across the sector.
