90% of Indian financial institutions prioritize AI for innovation: PwC
What's the story
A recent report by PwC India, titled 'Mapping the FinTech innovation landscape in India,' reveals that 90% of Indian financial institutions are prioritizing artificial intelligence (AI) and generative artificial intelligence (GenAI). The study involved 31 banks, insurance companies, and fintech firms. It found that these technologies are seen as the primary drivers of innovation within this sector.
Analytics importance
Data analytics plays a crucial role in financial services
The PwC India report also highlights the significant role of data analytics in the financial services sector. Approximately 74% of respondents acknowledged its importance in driving insights and decision-making processes. This underlines the growing reliance on technology and data-driven strategies within Indian financial institutions.
Innovation focus
Customer experience and product distribution are key innovation areas
The report further reveals that 84% of participants identified customer experience and engagement, as crucial areas for innovation. This includes processes such as acquisition, onboarding, and servicing. Additionally, over half of the respondents highlighted product distribution as another significant area of innovation within their organizations.
Governance maintenance
Financial institutions maintain robust governance amid tech advancements
The report notes frequent references to risk management, operations, and regulatory compliance in the survey responses. This suggests that financial institutions are maintaining robust governance frameworks despite rapid technological advancements. Mihir Gandhi from PwC India emphasized the need for fintech companies to balance growth with digital security, and regulatory compliance challenges.
Risk management
Risk mitigation and regulatory adaptation are critical factors
The report indicates that 65% of respondents view risk mitigation and adapting to changing regulatory landscapes as critical factors. This underscores the need of navigating regulatory challenges while innovating. Furthermore, 45% of participants prefer to promote innovation primarily through internal initiatives, showing a strong preference for using internal resources and expertise to drive innovation.
Collaboration benefits
Collaborative innovation is a key driver for fintechs
Vivek Belgavi from PwC India stated, "Collaborative innovation is now seen as a key driver for fintechs, enabling faster speed-to-market and delivering tangible benefits like new product offerings, increased productivity, and reduced operational costs." The report also identified resource constraints and technological complexity, as common challenges faced by companies while running their innovation initiatives.