Generative AI can help boost banking operations by offering better customer insights, risk management, and cost control: RBI report

RBI

Generative Artificial Intelligence (AI) could significantly enhance banking operations in India by offering better customer insights, improving risk management, and optimising cost control, according to a report by the Reserve Bank of India (RBI) published on ANI. The central bank said the technology can help financial institutions improve efficiency and deliver more personalised services at scale.

Enhancing customer understanding
As reported by ANI, the RBI noted that AI adoption in financial services is accelerating due to the need to improve customer experience, increase revenue, reduce operational costs, ensure regulatory compliance, and support innovation. Generative AI is enabling banks to process vast amounts of data, identify behavioural trends, and tailor services to customer needs.

Improving risk management
According to ANI, the report also highlighted that generative AI tools can strengthen risk assessment and fraud detection by analysing complex data in real time. AI-powered alternative credit scoring models are expanding financial access for individuals underserved by the traditional banking system. These models can evaluate creditworthiness using non-traditional data sources such as utility bill payments, mobile usage records, GST filings, and e-commerce activity, allowing “thin-file” and “new-to-credit” customers to enter the formal banking network.

Controlling operational costs
The RBI said AI is helping optimise operational workflows. AI-driven chatbots can handle customer queries 24/7, enabling faster resolutions and allowing human staff to focus on complex cases. This reduces service costs while improving operational efficiency across banking operations.

The report projected that the generative AI segment in financial services could surpass Rs 1.02 lakh crore (around USD 12 billion) by 2033, with annual growth between 28 and 34 per cent. The findings underline that, with proper use, generative AI can make India’s banking system more inclusive, customer-friendly, and growth-focused.