AI to Push Indian Banks Beyond Digitisation, Says FICCI-IBA-BCG Report
A new report says Indian banks must move beyond digitisation, using agentic AI to automate complex tasks and free staff for higher-value work.
Indian banks are at a turning point where simply digitising existing processes will no longer deliver the next wave of productivity gains, according to a joint report by FICCI, the Indian Banks' Association, and Boston Consulting Group. The report argues that true gains will come from fundamentally redesigning operating models around artificial intelligence (AI), particularly agentic AI that can handle complex, unstructured tasks.
The report highlights that despite heavy investment in digital infrastructure over the past decade, banks still rely heavily on manual work. For instance, a single loan application can require more than 25 documents, involve over 50 manual data-entry fields, and pass through six to eight layers of human review. Thousands of customer service agents are tied up in repetitive interactions, and branches can spend 10–20% of their time on routine servicing requests.
The first phase of digitisation, described as "coding the known," automated finite, rule-based processes like digital payments and identity verification. But that approach is limited by pre-programmed rules. The emerging AI era, the report says, will be driven by agentic execution—AI agents that can process unstructured information such as voice, documents, images, and free-form text, and execute tasks based on intent rather than fixed rules.
Conversational banking is identified as the next frontier. Customers are expected to interact with banks through voice and chat-based AI agents using natural language, moving beyond app-and-menu interfaces to always-on, personalised interactions that can understand intent, offer advice, and complete transactions.
To capture these gains, banks will need to flatten hierarchies, reskill employees, and empower teams. At the same time, risk management must evolve. Beyond credit risk, banks will need an integrated view of fraud, operational resilience, cybersecurity, and climate-related risks, with AI-enabled systems capable of assessing ripple effects across the enterprise and responding at machine speed.