TLDR: Financial services companies are increasingly adopting generative AI (GenAI) solutions for customer support, leading to a surge in demand for specialized startups. This shift aims to significantly reduce operational costs, enhance scalability, and improve customer interaction efficiency by automating routine queries.
The financial services sector is witnessing a significant transformation in its customer support operations, driven by the rapid adoption of generative artificial intelligence (GenAI) models. Startups are actively pursuing partnerships with banks and other financial institutions to deploy AI-powered solutions, aiming to streamline customer-facing processes from onboarding and servicing to basic query resolutions.
Industry insiders highlight that large banks traditionally incur substantial costs in running contact centers staffed by human agents. However, the advent of ‘agentic AI’ promises to resolve a large portion of these basic queries through software, offering a compelling alternative. Ramanthan RV, chief executive at Hyperface, a company that powers credit card stacks for banks, noted, ‘Currently in India the cost of running a GenAI model is at par with contact centre employees. But in the future, AI models can be scaled up exponentially which is not the case of call centres, and that is the big benefit that companies are looking for.’
Startups such as Gnani.ai, Arya.ai, Yellow.ai, and Hyperface are at the forefront of this wave, developing diverse AI use cases. Ganesh Gopalan, CEO of Bengaluru-based Gnani AI, which specializes in conversational AI tools for finserv companies and is backed by InfoEdge Ventures, stated, ‘Our models can reduce the cost for financial services by 40-50%, manage a lot of routine things.’ He further emphasized the scalability advantage: ‘If our client is serving 50,000 customers today, tomorrow they can scale it by five times, instead of hiring more agents to do this work.’
Yellow AI, supported by investors like Lightspeed and Westbridge Capital, also identifies financial services as a major sector. Rashid Khan, co-founder of Yellow AI, detailed their focus areas: ‘The use cases are majorly in card issue support, loan processing, customer acquisition and information regarding claims.’ He added that their AI models prioritize ‘accuracy, latency and making the bot sound more human.’
Also Read:
- Agentic AI in Financial Services Poised for Exponential Growth, Projected to Exceed $80 Billion by 2034
- Generative AI Adoption Soars in Enterprise Finance Departments
While the benefits of GenAI in terms of cost reduction, exponential scalability, and enhanced customer experience are clear, the integration of these advanced AI systems with legacy banking software and adherence to stringent financial regulations present significant deployment challenges. Nevertheless, the highly regulated financial services industry is increasingly recognizing the power of these new technologies to boost efficiency and improve customer engagement as the technology matures and its costs become more competitive.
