According to a report by EY, generative AI (GenAI) is reshaping India's financial services industry, driving significant improvements in customer engagement, operational efficiency, and risk assessment. The report, titled "Unlocking Productivity with Generative AI in India: The AI Mindset - 2025," projects a 34% to 38% increase in productivity for the Indian financial services sector by 2030, with banking seeing an even more substantial 46% boost.
The report reveals that 74% of financial institutions have already launched proof-of-concept projects, with 11% entering production-level deployment. Investment in generative AI is also growing, with 42% of organizations actively allocating budgets for AI initiatives. These institutions are rapidly adopting GenAI in key areas such as voice bots, email automation, business intelligence, and workflow automation.
Among these investments, customer service takes precedence, with 68% of companies prioritizing it for GenAI implementation, followed by operations (47%), underwriting (32%), sales (26%), and information technology (21%). These investments are yielding significant results: 63% of companies report improved customer satisfaction, while 58% report cost reductions.
Pratik Shah, Partner and National Leader, Financial Services, EY India, stated: "The financial services industry has moved from innovative pilots to practical applications in 2024-25. Companies are integrating generative AI with core banking systems across multiple areas including customer relationship management, loan origination, and card management platforms. These efforts significantly reduce operational costs, with AI-driven solutions bringing the unit cost of traditional manual processes down to a tenth of the traditional method."
He further emphasized that as companies move from pilot projects to large-scale implementation, the focus must shift from isolated use cases to enterprise-wide integration. Building robust AI governance, ensuring data security, and aligning technology with core business objectives are key to unlocking the full potential of generative AI. While non-banking financial companies and mid-sized banks have demonstrated early success, large banks are also accelerating adoption. In the coming years, the ability of financial institutions to effectively balance innovation with regulatory compliance will be crucial in driving sustainable growth, operational excellence, and superior customer experiences.
Key Highlights:
✅ Generative AI is projected to boost banking productivity in India by 46% by 2030.
✅ 68% of financial companies prioritize customer service for generative AI implementation.
✅ Large banks are accelerating generative AI adoption to reduce operational costs and enhance customer experience.
