In 2024, India’s financial services sector saw significant adoption of Generative AI (GenAI) beyond innovation projects to business-driven implementation. According to an EY India survey, 74% of financial firms have initiated GenAI proof-of-concept projects, with 11% already running in production. Non-Banking Financial Companies (NBFCs) and insurers are at the forefront of this adoption, leveraging GenAI to reduce operational costs by up to 90% in areas such as customer engagement, underwriting, and marketing automation.
The adoption of GenAI has resulted in significant productivity gains, with estimates suggesting a 34-38% boost across banking and insurance functions by 2030. Companies such as Bajaj Finance and Tata AIA Life have achieved notable successes with GenAI. Bajaj Finance saved Rs 150 crore in a year by deploying AI-driven bots for customer care, sales, and onboarding, while Tata AIA Life’s AI-powered chatbot handled 7.5 million customer interactions with a 98% completion rate.
Mid-sized banks have also implemented GenAI with strategic intent, integrating AI-driven orchestration layers with core banking systems. Larger banks, although initially cautious due to compliance concerns, have recently launched ambitious GenAI projects. These include AI copilots for cybersecurity and corporate lending, as well as on-premise GPU cloud deployments to support AI-driven customer care platforms.
NBFCs are pushing innovation further with conversational business intelligence bots, enabling executives to query real-time data beyond traditional dashboards. AI is also transforming customer service through automated voice bots and email management, with companies such as Tata Capital achieving significant reductions in resolution times and cost savings.
However, scaling GenAI in financial services comes with challenges, including strict regulatory requirements, data localization mandates, and cybersecurity concerns. To address these challenges, firms are deploying AI within Virtual Private Cloud environments and adopting PII redaction tools to ensure compliance. Despite these challenges, the adoption of GenAI is expected to continue to grow, driven by its potential to enhance productivity, reduce costs, and improve customer engagement. As the financial services sector continues to evolve, the use of GenAI is likely to play an increasingly important role in shaping its future.