India’s financial services sector witnessed significant real-world adoption of Generative AI (GenAI) in 2024, moving beyond innovation projects to business-driven implementation. A recent EY India survey found that 74% of financial firms have initiated GenAI proof-of-concept (PoC) projects, with 11% already running in production. Notably, Non-Banking Financial Companies (NBFCs) and insurers are leading the charge, leveraging GenAI to cut operational costs by up to 90% in areas like customer engagement, underwriting, and marketing automation.
The adoption of GenAI has proven especially impactful in enhancing productivity, with estimates suggesting a 34-38% boost across banking and insurance functions by 2030. Bajaj Finance, for example, saved Rs 150 crore in a year by deploying AI-driven bots for customer care, sales, and onboarding. The company aims to expand its targeted messaging base from 160 million to 500 million and triple its direct sales conversion rate using conversational GenAI. Meanwhile, Tata AIA Life’s AI-powered chatbot, Tasha, has handled 7.5 million customer interactions with a 98% completion rate, allowing policyholders to access over 60 digital services.
Mid-sized banks have also embraced GenAI with strategic intent, implementing AI-driven orchestration layers to integrate with core banking systems. Larger banks, while 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. IDFC FIRST Bank, for instance, introduced an AI-powered holographic avatar of Amitabh Bachchan to enhance customer engagement.
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 Tata Capital reducing resolution times from one day to 20 minutes while achieving 20% cost savings.
Despite its rapid adoption, scaling GenAI in financial services comes with challenges, including strict regulatory requirements, data localisation mandates, and cybersecurity concerns. Firms are addressing these by deploying AI within Virtual Private Cloud environments and adopting PII redaction tools to ensure compliance.