GenAI revolution: India’s financial sector eyes upto 46% surge in productivity by 2030

India’s financial services sector is poised for a significant boost in productivity, with levels expected to rise by 38% by 2030 and up to 46% in banking operations, while sales and customer service functions are projected to improve by 38% to 40%, according to the latest report from consulting firm Ernst and Young (EY).

The EY report revealed that 74% of financial firms have already initiated proof-of-concept projects to explore the potential of AI, with 11% advancing to full-scale deployment. Investment in AI is accelerating, with 42% of organisations actively channelling budgets into AI initiatives. “They are rapidly adopting GenAI across key areas such as voice bots, email automation, business intelligence, and workflow automation,” the report stated.

The analysis, which covered over 700 roles—more than 300 in banking and over 400 in insurance—predicted that GenAI will improve productivity by 34% to 38% by 2030.

Productivity Trends

Credit and collections processes are set to benefit from a 34% to 36% rise in productivity. In the insurance sector, customer service is projected to see an estimated 48% surge in efficiency. New business processing, sales, and partner management could improve by up to 45% to 48%. Investments in new product development and claims management are also emerging as high-impact areas where GenAI can significantly enhance productivity, the report argued.

Smart Automation

NBFCs (Non-Banking Financial Companies) are leveraging GenAI to automate business intelligence functions, gaining real-time insights into profitability and operational efficiency. Large banks are aiming for enterprise-scale AI rollouts, including cybersecurity co-pilots, AI-driven underwriting assistants, and multi-channel AI-powered customer care platforms. Meanwhile, mid-size banks are focusing on building GenAI-driven orchestration layers that integrate AI insights with core banking functions.

According to EY, AI-powered customer service and collections platforms are automating high-volume interactions across multiple digital channels, delivering faster responses and more personalised experiences with greater accuracy. Compliance and regulatory teams are also improving query handling by adopting conversational business intelligence bots. “Key applications include customer interactions via WhatsApp, email, SMS, mobile apps, websites, and voice channels,” the report noted.

Data Localisation and Security

Data localisation rules are reshaping AI adoption, pushing financial firms to keep GenAI endpoints within India, either through on-premise setups or India-based cloud providers. At the same time, data privacy remains non-negotiable. To protect sensitive customer information, firms must avoid sending Personally Identifiable Information (PII) to GenAI APIs, relying instead on PII redaction tools and anonymised data to ensure security. “Additionally, financial institutions must deploy GenAI solutions within secure Virtual Private Cloud (VPC) environments to mitigate cybersecurity risks.”

Pratik Shah, Partner and National Leader – Financial Services, EY India, said, “The financial services industry has moved beyond innovation pilots to real-world implementation in 2024-25. 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 one-tenth of traditional manual processes.”