Generative AI has moved well beyond experimental chatbots. Banks now deploy AI assistants capable of real-time policy summaries, hyper-personalised financial recommendations, and context-aware conversations, writes Calsoft's Principal Architect Debajit Sen.

Finance in 2025: How AI will redefine the global financial order

CNBCTV18·author

Published Oct 18, 2025 | 1:23 AM GMT-04

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Artificial Intelligence has long been part of financial services discussions; but its earlier reputation was marred by hype and limited results. Today the story is different. With advanced model training, edge computing, and powerful data infrastructures, AI has matured into a true competitive differentiator. Financial institutions are embedding AI across mission-critical functions; customer experience, fraud detection, compliance, and operations, while facing higher customer expectations and tighter regulations.

Evolving customer experience: From basic bots to advanced AI assistants

Generative AI has moved well beyond experimental chatbots. Banks now deploy AI assistants capable of real-time policy summaries, hyper-personalised financial recommendations, and context-aware conversations. These assistants reduce strain on service teams while improving engagement and loyalty.

The business value is clear: faster query resolution, higher customer satisfaction scores, and measurable cost savings from reduced manual workloads. But institutions must balance innovation with responsibility—ensuring secure deployments and adherence to stringent data protection laws when handling sensitive financial data.

Real-time risk management and fraud prevention

Fraud detection has shifted from static, rule-based systems to dynamic AI models. Machine learning can now spot anomalies before transactions close, cutting off attacks mid-stream. Leading banks using AI-driven risk models report up to 30% faster fraud detection and greater accuracy in credit approvals, particularly in underserved markets where credit histories are sparse.

The priority is no longer just intelligence, but immediate and precise responses that sustain customer trust and safeguard financial ecosystems.

Open finance and regulatory changes

Open finance regulations—from Europe’s PSD3 to India’s Account Aggregator framework and Australia’s Consumer Data Right—are redefining how financial data flows.

For consumers, it means unified dashboards and tailored offers. For institutions, it means building secure, interoperable APIs while meeting compliance head-on. Forward-looking banks view regulation not as a burden but as an innovation lever—creating customer-centric products and unlocking new revenue models.

Intelligent process automation reimagines operations

Intelligent Process Automation (IPA) blends AI, machine learning, and natural language processing to reimagine workflows—not just accelerate them. From onboarding and underwriting to claims checks, IPA improves speed, accuracy, and adaptability.

The ROI is tangible: institutions deploying IPA have reported 40% faster processing times and consistent reductions in operational errors. No longer limited to efficiency gains, IPA is becoming a revenue enabler, with nearly 70% of banking executives expecting AI to directly contribute to top-line growth.

Building trust through responsible AI

Trust has become the differentiator. The EU’s AI Act, U.S. fairness guidelines, and India’s DPDP Act are raising the bar for transparency, fairness, and data protection.

For financial institutions, responsible AI now requires:

- Clear model documentation
- Systematic bias testing
- Transparent audit trails
- Escalation channels for explainability

The winners will be those who don’t just deploy AI but also explain why it works—aligning ethical governance with performance.

Wealth management: Hyper-personalised, AI-driven

Next-gen investors—particularly Gen Z and millennials—expect personalized, real-time digital platforms. AI now powers bespoke portfolio creation, automated tax-loss harvesting, and continuous rebalancing tied to life-stage objectives.

Here, differentiation is not about feature checklists but delivering actionable, trustworthy insights that align with client goals.

Looking ahead: Responsible and strategic AI adoption

For financial institutions, the real question isn’t whether to use AI but how to use it responsibly and at scale. Winning in this era requires:

- Multidisciplinary teams that unite technology, compliance, and risk functions
- Modern data infrastructures that support real-time intelligence
- A willingness to rethink entrenched, legacy processes

AI is now the heartbeat of operations, fraud defense, customer experience, and compliance. Institutions that combine technological excellence with ethical governance will set the pace for the future of financial services.

Conclusion

Finance leaders stand at a turning point. Those who treat AI as a strategic, trust-centered capability—not just a tool—will define the next decade. The opportunity is clear: enhance efficiency, unlock new revenues, protect customers, and deliver intelligent, ethical financial services at scale.

—The author, Debajit Sen, is Principal Architect, Calsoft. The views are personal.

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