Gen AI to boost Indian financial sector, could add $80 bn to GVA by 2030

Generative Artificial Intelligence (AI) could significantly enhance India's financial services sector, potentially contributing $66-$80 billion to the Gross Value Added (GVA) by 2030 according to a new report by EY India. The report underscores Gen AI's substantial impact, estimating a 22% to 26% increase in GVA within the sector.  

As per the report, survey participants in the financial services sector emphasized two key areas, that are customer service and cost reduction. Approximately 61% believe Gen AI will greatly impact the entire value chain, making it more efficient and responsive to market dynamics. 

Furthermore, financial firms recognise the transformative potential of Gen AI, with 78% of survey respondents having implemented the technology in at least one use case or planning to pilot it in the next 12 months. 

Focus areas identified by survey participants include customer service (94%), cost reduction (78%), and driving innovation (61%). 

Commenting on the findings, Abizer Diwanji, Head — Financial Services, EY India said, “In India's fast-evolving financial services sector, Gen AI is a game-changer, fostering innovation and competitiveness. It promises growth, efficiency, and enhanced customer experiences. However, responsible adoption is key, ensuring ethical data use and transparency with customers. Financial firms must promote AI awareness and cultivate a culture that increases its potential for positive impact, while curtailing misuse.” 

Pratik Shah, Partner and Financial Services Consulting Leader, EY India, added, “For a long time, AI has pushed the digital evolution of the sector, but with the emergence of Gen AI, we are at the cusp of a significant shift. In the realm of customer experience, Gen AI offers personalised experiences tailored to individual needs and preferences. It further holds immense promise in risk management and fraud detection.” 

Organisations prioritise achievable benefits, with 83% planning to partner with external tech providers for Gen AI implementation, while 67% express confidence in developing in-house capabilities, as per the report.

The report also revealed that organisations worldwide typically explore 7-10 crucial use cases, with identifying use cases and addressing skills gaps being primary obstacles for 44% of participants. 

Enhanced regulatory scrutiny, particularly around governance, standards, data privacy, model validation, and financial data cybersecurity, poses challenges for financial institutions adopting Gen AI. 

CXOs in the financial services sector also emphasized the importance of striking the right balance between execution risks, costs, and viability. Collaboration between functional and technical divisions, aligned with long-term leadership strategy, is crucial for successful Gen AI implementation.