The Indian banking sector needs to develop artificial intelligence (AI) driven solutions, establish governance frameworks for these technologies, and strengthen its role in realizing the vision of “Viksit Bharat” (Development of India).
According to a new report by Pricewaterhousecoopers (PWC), entitled “Viksit Banking – Roadmap for the Banking Sector in India for 2047,” the government is working to expand infrastructure and access to banks, but regulators are innovating and focus on new recruiting challenges. Technology such as blockchain and generator AI (genai).
“The future of the banking sector looks promising. Many banks are already on the path of change, highlighting digital solutions, innovation and impact-driven initiatives. However, the sector is central to the country’s economic development. There is still much to be done to play a role. The next decade will be extremely important, and banks will have a clear strategy to become a key enabler of growth in various sectors. It needs to be formulated,” the PWC report states.
“The growth of the Indian banking system is driven primarily by the adoption of digital technologies, the evolution of digital public infrastructure (DPI) and government initiatives,” the report states.
India plans to leverage AI to achieve Viksit Bharat’s goals by 2047. The economy of the world’s most populous nation is 1.4 billion people, about 18% of the world’s most populous people, and is set to dominate the world’s economic situation, with the fastest position. You will be maintaining it. – Grow large economies over the next two fiscal years. The World Bank forecasts India’s growth of 6.7%, surpassing the global growth of 2.7%.
India is projected to be the third largest economy in the world with a $5 trillion economy between 2027 and 2028, and is using emerging technologies such as AI and blockchain as key catalysts for growth.
Investing in the cloud, genai
According to the PWC report, the Indian banking sector must consistently invest in improving cloud technology, generative AI and product delivery, digital capabilities and overall customer experience.
AI is revolutionizing banking operations where platforms like Bhashini enable local language translation. By leveraging historical data, banks can make proactive, data-driven decisions that enhance customer service, increase operational efficiency, improve service delivery, and effectively manage risks. The report noted.
Intelligent automation is another area where banks need to invest in streamlining their operations, reducing errors and improving efficiency. Technology such as AI is expected to reduce manual intervention and make processes like customer (KYC), lending, transaction monitoring more more automated and intelligent.
Additionally, digital assets such as central bank digital currency (CBDC) and tokenized assets on the blockchain provide new cost-effective ways for customers to engage in financial services, and intelligent banking operations It will further strengthen the
Three important sectors
To realize its vision of becoming a “Viksit Bharat” by 2047, India must focus on increasing the strengths of three key sectors: agriculture, manufacturing and services.
“MSMES (micro, small and medium-sized enterprises) contributed to 45% of India’s exports in 2023-24. Its growth further reduced compliance complexity and ease of athletic business. There are significant improvements in reducing the number of digital commerce (ONDC) platform’s open network is intended to digitize MSME-related data.
To accelerate the pace of the agricultural economy, government initiatives include market access, digital commerce networks, and a unified lending interface (ULI) with liberalised trade policies to promote exports. It enables diversification processes.
ULI was designed and developed by Reserve Bank Innovation Hub (RBIH), a subsidiary of RBI. Started as a pilot program in August 2023, RBI’s ULI is expected to completely transform domestic credit delivery. It is built to facilitate access to authenticated data from a variety of sources through a standardized application programming interface (API) that allows all lenders to connect seamlessly via plug-and-play models. It is a technology platform.
Facilitating AI, robotics, IoT and industrial growth
With the advent of Industry 4.0, technologies such as AI, Robotics, The Internet of Thing (IoT) and big data analytics are driving industry growth, according to the PWC report.
Additionally, it enhances labor force, reforms labor laws, addresses supply chain challenges, improves access to markets and finance, promotes research and development (R&D) (R&D), industrial parks, corridors, and practices India’s ongoing efforts to develop can further promote the expansion of the industry.
In the services sector, banks play an important role in promoting export and import trade, especially for IT-enabled services companies. The Global Capacity Centre (GCC) of many multinationals is expanding at a combined annual growth rate (CAGR) of over 16%. With India’s skilled labor, reduced operational costs and a business-friendly environment, GCC is expected to continue growing domestically for the next few years.
The PWC report acknowledged that the India Stack Initiative has changed the landscape of India’s DPI and gained global recognition for its strong digital capabilities in identity, payments and data management. This fundamental advancement, including systems such as the Unified Payments Interface (UPI), Aadhaar, ONDC, and ULI, has played a key role in promoting financial inclusion in the digital-first era.
ULI is a new addition to India’s DPI credit ecosystem and will help lenders to ease their credit valuation and payment processes. According to PWC’s analysis, ULI is expected to become an integral part of the lending ecosystem in the future.
Investing in building digital infrastructure
As technology becomes increasingly essential for business operations, Indian banks are investing heavily in digital infrastructure, offering services such as mobile banking apps, internet banking and other digital tools to help customers experience and It improves convenience. Transaction volumes have risen, services are available around the clock, and modernizing technology and ensuring resilience has become important for banks. In addition to these advancements, banks are also focusing on adopting emerging technologies and strengthening cybersecurity measures.
The PWC report highlighted that by adopting cloud infrastructure, banks can quickly expand their IT resources, build or expand their infrastructure, and implement advanced digital banking capabilities.
“RBI’s cloud initiative, with pilots expected to be launched by 2025, will provide a public cloud platform for financial institutions for affordable data storage services,” the report noted.
The integration of AI and machine learning (ML) offers many opportunities for banks, including conversational AI chatbots, credit decisions, fraud detection, hyper personalization, and target marketing. AI can also automate various service delivery processes, reducing operational costs while improving customer satisfaction.
“Banks face many challenges while implementing new technologies, primarily due to lack of understanding of the economic impact of IT investment and the need for IT specialists. “Internal issues such as high turnover rates are an ongoing hurdle outside customer recruitment and change management,” the report states.
“Regulation compliance and a skilled workforce that is well-versed in new technology are our priority. Effective change management is key to successfully integrate new technologies and staying competitive,” the report said. I added.
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