Daijiworld Media Network - New Delhi
New Delhi, Mar 13: Indian banks are benefiting from steady credit expansion, strong digital public infrastructure, and the rapid adoption of artificial intelligence-driven operating models, according to a report released by KPMG International on Friday.
The report noted that the sector is keeping pace with global counterparts by scaling artificial intelligence initiatives from pilot projects to enterprise-wide deployment. Banks are also investing heavily in workforce reskilling while strengthening cybersecurity and ESG frameworks to support long-term resilience.
Based on a survey of 110 CEOs in the global banking and capital markets sector, the report found that 83 percent of respondents are confident about growth over the next three years. Additionally, 65 percent identified AI as a top investment priority.
Around 70 percent of CEOs said they plan to allocate between 10 and 20 percent of their budgets over the next 12 months toward AI initiatives. Meanwhile, 59 percent believe that agentic AI will have a transformative impact on their organizations, and 69 percent expect returns on AI investments within one to three years.
The report also highlighted the growing importance of workforce readiness in the age of AI. About 83 percent of banking and capital markets CEOs said reskilling employees for AI is a priority. Nearly 79 percent believe AI has redefined the skills required for entry-level roles, while 78 percent warned that a lack of AI readiness in the workforce could negatively affect organizational performance.
Sanjay Doshi, Partner and Head of Transaction Services and Financial Services Advisory at KPMG in India, said the push toward scale and strategic mergers and acquisitions seen globally is increasingly influencing the Indian banking sector as well.
According to Doshi, scale in India is not just about size but also about expanding distribution networks, accelerating digital transformation, and improving cost efficiency. He added that deeper technology investments and modernized operating models—combined with selective consolidation and partnership-led growth—could help banks access new markets and strengthen their long-term competitiveness.
The report also flagged key risks facing the sector. About 86 percent of CEOs identified cyber insecurity as the biggest threat to growth, followed by ethical challenges cited by 56 percent of respondents and concerns over data readiness and regulatory gaps highlighted by 55 percent.