GenAI to boost productivity in Indian banking by 46% by 2030: Report

Generative Artificial Intelligence (GenAI) is set to transform India’s banking sector, with productivity gains of up to 46% expected by 2030, according to a new EY report. The study highlights how financial institutions are increasingly adopting AI-driven solutions to enhance efficiency, reduce costs, and improve customer experiences.

The report reveals that 74% of financial firms have already begun experimenting with GenAI, while 11% have moved to full-scale deployment. Investment in AI is growing, with 42% of organizations allocating budgets for AI initiatives. Banks and financial institutions are using GenAI for customer service automation, underwriting, sales, and business intelligence, with customer service being the top priority for 68% of firms. The results are already visible, as 63% of financial firms report improved customer satisfaction, and 58% have seen cost reductions.

Pratik Shah, Partner and National Leader – Financial Services at EY India, noted that the sector has moved beyond experimentation to real-world implementation. He highlighted that banks are integrating GenAI with core systems such as CRM, loan origination, and card management, leading to a significant drop in operational costs. AI-powered solutions have reduced costs to nearly a tenth of traditional manual processes.

The study analysed over 700 roles in the financial sector, predicting that GenAI will improve productivity by 34% to 38% across banking and insurance. Banking operations alone could see efficiency gains of up to 46%, while customer service and sales functions may improve by 38% to 40%. In the insurance sector, customer service efficiency is expected to increase by 48%, with new business processing and claims management seeing gains of up to 48%.

While GenAI adoption is accelerating, challenges remain. Regulatory and cybersecurity requirements pose hurdles, with data localization mandates requiring firms to host AI solutions within India. Financial institutions must also implement measures to protect customer data, such as anonymizing personally identifiable information before using AI tools. Despite these challenges, the banking sector is rapidly moving toward AI-driven transformation, with the technology poised to reshape operations, enhance security, and improve customer engagement in the coming years.