Banks report 10-50% efficiency gains from AI

Mumbai: Banks are reporting 10-50% improvements across productivity, turnaround time and operating costs from artificial intelligence-led initiatives, with some lenders handling up to 30% more servicing volumes without adding manpower as AI moves deeper into corporate banking, collections and transaction processing.The gains vary across operations: Axis Bank has recorded productivity improvements of more than 10% in selected customer journeys, Kotak Mahindra Bank can handle 20-30% more corporate-servicing volumes with the same headcount, while AU Small Finance Bank has cut the operating cost of AI-led voice operations by 50%.Also read: Cyberattacks on banks, including AU Small Finance Bank, worry insurers as claim risks riseKotak has deployed AI across its wholesale banking operations. Under Project ACE, the bank has automated the classification and routing of corporate customer requests related to account servicing, payments, transaction disputes and inward remittances."The project has resulted in a massive efficiency gain, resolution tags have improved twice and because of this efficiency gain, there is surplus capacity, allowing the same headcount to handle 20-30% more volumes with the same capacity," said Anu Aggarwal, head-corporate and transaction banking, Kotak Mahindra Bank.The lender is also developing predictive tools to forecast corporate cash inflows, upcoming payments and surplus liquidity, and recommend investment options for excess funds."We are moving from information to intelligence. Instead of just providing CFOs with dashboards and data, we want to use predictive models to help them anticipate collections, upcoming payments and surplus liquidity, while suggesting where excess funds can be invested," Aggarwal said.HDFC Bank said digitisation and straight-through processing reduced service-delivery turnaround times by 30% during the September quarter, while customer visits per frontline employee increased nearly 50%. Former chief executive Sashidhar Jagdishan had indicated that greater AI adoption could reduce manpower requirements in back-office, credit and corporate-support functions.Axis Bank is embedding AI across customer servicing, operations and decision-making through its enterprise-wide AXIOM platform. Its AI bots handled nearly 60% of collection calls during the September quarter. "AI-driven solutions such as Doc AI, Voice AI and GenAI-powered collections continue to enhance customer experience, improve operational efficiency and deliver better business outcomes," said Amitabh Chaudhry, MD and CEO, Axis Bank.ICICI Bank has developed an enterprise AI platform covering customer onboarding, fraud detection, portfolio monitoring, document processing and customer servicing. "Together, these capabilities help simplify processes, improve turnaround times and support decision-making across multiple banking functions," said Sandeep Batra, executive director, ICICI Bank.