Loan origination & disbursement, CX, security key use cases for GenAI in BFSI space: Birlasoft's Chandna

Technologies like Artificial Intelligence (AI) and Blockchain are currently revolutionising the banking and financial services sector. Notably, their synergistic potential is also aiding banks in their journey towards digital transformation. In an exclusive interaction with TechCircle, Vikram Chandna, SVP & Vertical Head of Financial Services and Hi-Tech at Indian IT services company Birlasoft explains how AI and Blockchain are driving banking innovation by automating processes, enhancing security, and tailoring customer experiences. He also discussed the challenges faced by large banks in implementing these technologies and the future of tech-driven innovation in the sector. Edited excerpts.

How are technologies such as GenAI transforming BFSI operations? Can you name any specific area where AI is offering a tangible improvement to lenders?

At the core, when we talk about GenAI it is about focusing on its ability to create new content, whether text, images, code, or even synthetic data – with foundation models and large language models (LLMs) as core components. GenAI's ability to generate new content is being leveraged across functions like customer service, marketing, risk management, and fraud detection, automating tasks and creating new products and services. One of the key areas we observe is in loan origination and disbursement where GenAI is by streamlining traditionally resource-intensive processes. By automating critical steps such as document verification, credit scoring, and underwriting, AI has drastically reduced manual intervention, enhancing efficiency and accelerating approval timelines.
Beyond operational improvements, AI is transforming customer experiences through intelligent virtual assistants and chatbots, enabling seamless onboarding and frictionless interactions. These advanced systems enhance accessibility, deliver real-time personalised support, and create a more intuitive lending experience. AI also strengthens security with real-time fraud detection, minimises human error, and expedites disbursement, benefiting both lenders and borrowers..
 
Blockchain and AI are often seen as game changers in BFSI. How do you see their combined potential in improving security, transparency, and fraud prevention in financial transactions?

The convergence of blockchain and AI is revolutionising financial services with enhanced security, transparency, and efficiency. Blockchain's immutable ledger ensures data integrity, crucial for AI-driven decisions in credit risk and fraud detection. AI-powered smart contracts automate agreements, reducing processing times and minimising errors. AI's anomaly detection, combined with blockchain's tamper-proof records, defends against fraud. Regulatory compliance is another domain where the synergy of these technologies is making a profound impact. Blockchain provides an auditable trail of AI-driven financial decisions, ensuring transparency and adherence to stringent regulatory standards. Leading financial institutions such as JP Morgan Chase are already harnessing this combination to boost cross-border payments. Also, AXA Insurance integrated smart contracts for claims processing, and HSBC is leveraging blockchain to strengthen Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance. I believe that as these innovations continue to evolve, they will redefine trust and efficiency in financial services, setting new benchmarks for security, transparency, and operational excellence.
 
There’s growing concern about AI-driven automation replacing jobs in financial services. How do you view AI’s role in augmenting human expertise rather than replacing it, and how should firms approach workforce transformation?

Concerns about AI-driven job displacement often overshadow AI's role in augmenting human expertise. AI automates repetitive tasks, enabling finance professionals to focus on strategic decision-making, customer relationship management, and risk assessment. Financial institutions are investing in upskilling programs to facilitate human-AI collaboration, optimising operations while preserving human intelligence for complex problem-solving.
 
Data security remains a top concern in AI adoption. What are the best practices financial institutions should follow to ensure compliance and mitigate risks while leveraging AI-driven automation?

To mitigate security risks in AI adoption, BFSI firms must implement robust frameworks including ISO 27001 Compliance, ISO 27701 Privacy Management, NIST Cybersecurity Framework, and SOC 2 Audits. In addition to these standards, continuous monitoring, advanced encryption techniques, and ethical AI governance frameworks are essential in maintaining security and trust.
 
Birlasoft has been a key player in driving digital transformation for BFSI. How do you ensure seamless AI adoption while delivering long-term value to financial institutions?

Our AI adoption approach for BFSI prioritises seamless integration and long-term value, focusing on a phased model that balances immediate impact with sustainable transformation. We focus on high-impact, low-risk applications like code acceleration and automated document processing to drive early benefits and later enable AI for critical use cases, including customer onboarding, fraud detection, and risk assessment. Our long-term adoption is strengthened through predictive analytics, underwriting automation, and dynamic pricing.
 
What are the biggest challenges large banks face in implementing AI and blockchain, and how is Birlasoft helping them overcome these issues?

Large banks encounter significant challenges in implementing AI and blockchain, including regulatory compliance, data security, integration complexities, and change management. Strict adherence to compliance standards, reliance on legacy IT infrastructure, and data privacy concerns add layers of complexity to large-scale adoption. Additionally, interoperability issues and a shortage of skilled talent further hinder seamless implementation.
We address these with a structured, scalable approach, supporting system modernisation and transitioning to cloud-based environments. Our expertise in data governance ensures compliance with regulations like KYC/AML. AI-powered fraud detection, blockchain-based smart contracts, and AI-driven predictive analytics are enhancing security, transparency, and risk management. That said, by addressing these challenges with a strategic, compliance-driven approach, we empower large banks to apply AI and blockchain effectively, unlocking innovation, enhancing security, and driving long-term growth.
 
Looking ahead, what are the most promising tech-led innovations in the BFSI sector in the next 4-5 years?

The BFSI sector stands at the cusp of transformative innovations driven by AI and Blockchain. Over the next five years, AI-powered hyper-personalisation will transform financial services, and blockchain-driven DeFi platforms will increase accessibility and cost-efficiency. AI-powered fraud detection will bolster security, while RegTech solutions will streamline compliance. Ethical AI deployment, robust security, and regulatory adherence will remain paramount. The future of BFSI lies in the synergy between AI and blockchain, creating a seamless, efficient, and fraud-resistant financial ecosystem.