AI Impact: Half the Roles in Indian Banking Sector to Be Reshaped, Says BCG Report

As digital transformation accelerates, India's banking sector is poised for a major shift. A recent report highlights how artificial intelligence (AI) could reshape up to 50% of roles in the sector, addressing longstanding productivity issues and enhancing operational efficiency.

Up to 50% of Banking Jobs Set for Transformation with AI Integration

According to the Boston Consulting Group, 35-50% of roles in the Indian banking industry may be reshaped depending on how effectively banks adopt AI solutions. Despite a 5x increase in IT spending over the past decade, productivity gains have remained minimal. Banks now face a crucial turning point where technology adoption is critical to break stagnating cost structures and accelerate performance.

Technology Spending and Its Limited Impact So Far

Although IT operating expenses in Indian banks have seen a compounded annual growth rate of 17.4% till FY25, actual productivity improvements have stayed at just 1%. This contrasts with more advanced global banking systems. AI presents an opportunity to correct this imbalance by automating repetitive tasks, enhancing decision-making, and enabling better customer service delivery at scale.

Credit Growth Linked to Economic Ambitions

BCG's report stressed the importance of boosting credit growth to achieve India’s development goals under the Viksit Bharat mission. Banking asset growth must outpace nominal GDP growth by 3-3.5 percentage points. However, FY25 saw credit growth at 12%, falling short, as nominal GDP rose by 9.8%. Such trends may hamper long-term ambitions unless addressed swiftly with better financial outreach and data analytics.

Read More: Uttar Pradesh Govt to Use AI for Delivering Benefits Under Schemes Like Mukhyamantri Jan Arogya Yojana!

Limited Credit Access for New Customers a Concern

Only 1/3 of India's 100 crore adult population has credit records with information companies. The annual 2% addition rate for ‘new-to-credit’ customers signals slow progress. AI-driven models could help assess risk in low-information environments, potentially expanding the formal credit base more efficiently.

Conclusion

The Indian banking sector faces a pivotal opportunity to embrace AI and redefine operational efficiency. With a potential to reshape up to 50% of roles, AI adoption presents a strategic pathway to tackle cost challenges, improve productivity, and support sustainable credit growth critical to India's development vision.

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