GenAI to drive productivity up to 38% in Indian financial services by 2030: EY Report

Generative AI (GenAI) will improve productivity levels for Indian financial services by 34-38 per cent and by 46 per cent for banking operations in 2030, said EY in a recent report looking at use of GenAI in India’s financial services landscape.

The study said that 74 per cent of financial firms have initiated proof-of-concept projects, and 11 per cent have moved to production-level deployments. Investment in GenAI is also increasing, with 42 per cent of organisations actively allocating budgets toward AI initiatives. They are rapidly adopting GenAI across key areas such as voice bots, email automation, business intelligence and workflow automation.

In terms of GenAI implementation, 68 per cent of firms prioritise it for customer service, followed by operations (47 per cent), underwriting (32 per cent), sales (26 per cent), and IT (21 per cent). “These investments are already delivering measurable results: 63 per cent have seen improved customer satisfaction levels, while 58 per cent of firms report cost reductions,” said EY in a press release.

Pratik Shah, Partner and National Leader – Financial Services at EY India said, “Firms are integrating GenAI with core banking systems, including CRM, loan origination, card management platforms, among other areas. These efforts have reduced 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.”

Shah advised a shift in focus from isolated use cases to enterprise-wide integration as firms move to large-scale implementations. Report showed that NBFCs, in particular, are aggressively deploying GenAI to automate business intelligence functions, enabling real-time insights into profitability and operational efficiencies. On the other hand, large banks are focusing on enterprise-scale implementations, such as cybersecurity copilots, AI-driven underwriting copilots, and multi-channel AI-powered customer care platforms. Meanwhile, mid-sized banks are working on GenAI-driven orchestration layers that integrate AI insights with core banking functions.

In terms of sales and customer service, the use of GenAI is projected to improve functions by 38-40 per cent. Productivity in credit and collections processes will improve 34-36 per cent. In insurance, the technology is expected to increase efficiency by 48 per cent in customer service. New business processing, sales, and partner management could see improvements of up to 45-48 per cent. For compliance and regulatory functions, firms are using AI-powered query like conversational business intelligence (BI) bots.

Regarding challenges, the report said that stringent regulatory and cybersecurity requirements hinder Ai scaling. Data localization mandates require financial firms to host GenAI endpoints within India using on-premise solutions or India-based cloud providers. Data privacy concerns necessitate that firms must avoid sending Personally Identifiable Information (PII) to GenAI APIs and anonymized data to safeguard sensitive customer information. Further, financial institutions have to deploy GenAI solutions within secure Virtual Private Cloud (VPC) environments to mitigate cybersecurity risks.