August 26, 2025

Hold on tight, banking world! A stunning report from Boston Consulting Group (BCG) says AI could reshape 35 to 50 percent of jobs in Indian banks. Sounds like a revolution, doesn't it? Despite banks pumping money — almost five times more — into IT over the past 10 years, their productivity has barely budged, just a tiny 1 percent bump! The experts say India’s banks are lagging behind global giants. But here’s the twist: the magic of AI might just be the answer. "We feel that about 35-50 per cent of jobs can get reshaped if banks are able to boldly embrace these new technologies, and that will be a prerequisite if the banking sector has to break the sticky cost structures that they've been encountering over the last few years," said Ruchin Goyal, senior partner at BCG, during the Fibac event in Mumbai. While AI has rocked job markets elsewhere, like big layoffs in IT, Indian banks are also seeing a drop or no growth in employee numbers because technology is taking over old roles. And guess what? Indian banks still spend less on tech compared to their global buddies, but they are catching up fast. The report highlights some spicy numbers: IT costs grew fastest among bank expenses, jumping 17.4 percent per year, beating other costs like non-employee operating expenses and general overheads. But wait, there’s more! The report stressed that for India to become a developed nation by 2047, the credit growth from banks must outpace the country's growth in GDP by 3 to 3.5 percentage points. Yet, credit growth slowed to 12 percent in FY25, while nominal GDP rose 9.8 percent. Plus, new customers getting credit is shrinking by 2 percent every year. Only about one-third of India's 100 crore adults have credit records. "It will take a very long time if the additions are just 2-3 per cent," warned Goyal. So, Indian banks have a tasty challenge to serve both - reshaping jobs with AI and lending more to power ‘Viksit Bharat’. The future of banking feels like a thrilling rollercoaster ride!

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Tags: Ai in banking, Indian banks, Job reshaping, Credit growth, Boston consulting group,