Generative AI’s impact on the gross value added (GVA) within the financial services sector is most significant, ranging from 22 to 26 per cent. Consequently, GenAI could contribute a potential addition of $66-80 billion to the GVA by the year 2030, according to a report by EY.

At least 61 per cent of respondents in the financial services sector believe that Gen AI will have a huge impact on the entire value chain, making it more efficient and responsive to market dynamics.

The report titled ‘The AIdea of India: Generative AI’s potential to accelerate India’s digital transformation,’ highlights that financial firms have recognised the transformative potential of Gen AI, as 78 per cent of survey respondents have either implemented the technology in at least one use-case or have plans to pilot it over the next 12 months.

‘Game-changer’

Abizer Diwanji, Head, Financial Services, EY India, said, “In India’s fast-evolving financial services sector, GenAI is a game-changer, fostering innovation and competitiveness. It promises growth, efficiency, and enhanced customer experiences. However, responsible adoption is key, ensuring ethical data use and transparency with customers. Financial firms must promote AI awareness and cultivate a culture that increases its potential for positive impact while curtailing misuse.”

Key focus areas

A majority of survey participants highlighted their focus on two key areas: customer service and cost reduction. When asked about the facets of business that GenAI would impact most, 94 per cent firms mentioned ‘customer experience’, followed by 78 per cent citing ‘cost reduction’, and 61 per cent believed it would have the most impact on ‘driving innovation’.

Firms are investing in areas that offer tangible and readily achievable benefits. After prioritising the use cases, organisations must make a careful decision regarding the implementation strategy.

When asked about executing their GenAI strategy, a majority of 83 per cent said they envision partnering with external tech providers, whereas 67 per cent expressed confidence in developing LLMs/in-house capabilities. While the latter would help them ensure tailor-made solutions, CXOs also cited that it may carry an execution risk, including talent availability.

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