AI era to reshape banking operations, unlock productivity beyond digitisation: Report
Aug 15, 2026
New Delhi [India], August 15 : Indian banks will need to move beyond digitising structured processes and fundamentally redesign their operating models to unlock the next wave of productivity from artificial intelligence (AI), with agentic AI expected to automate complex tasks while enabling employees to focus on higher-value decisions, according to a report by FICCI, IBA and Boston Consulting Group (BCG).
The report said the maximum productivity gains from AI will come not from simply automating existing workflows, but from rewiring bank operations, with repetitive tasks and activities with predictable outcomes automated and human resources redeployed towards decisions involving greater complexity, judgement and value.
Despite significant investments in digital infrastructure over the past decade, banks continue to rely on substantial manual intervention, physical documentation and complex processes. A single loan journey can require more than 25 documents and involve 50 or more manual data-entry fields, while six to eight layers of manual review may be required. Banks also dedicate thousands of customer service agents to repetitive interactions, while 10-20% of branch time can be consumed by routine servicing requests.
The report said the first phase of banking digitisation focused on "coding the known", automating finite, rule-based journeys involving structured information. This has delivered significant gains in areas such as digital payments and identity verification, but conventional automation remains constrained by the rules and permutations that have been explicitly programmed.
The emerging AI era will instead be driven by agentic execution, where AI agents can process unstructured information such as voice, documents, images and free-form text and execute tasks across multiple permutations based on intent rather than predetermined rules.
The report also identified conversational banking as the next frontier, with customers increasingly expected to interact with banks through voice and chat-based AI agents using natural language. Such systems could move banking beyond the app-and-menu model towards always-on, personalised interactions that can understand intent, provide advice and execute transactions.
To capture these gains, banks will need to flatten organisational hierarchies, reskill employees and empower teams, the report said.
At the same time, AI will require banks to rethink risk management. Beyond credit risk, institutions will need an integrated view of fraud, operational resilience, cybersecurity and climate-related risks, with AI-enabled systems capable of assessing how changes can ripple across the enterprise and responding to threats occurring at machine speed.
