The banking sector is undergoing one of the biggest shifts in its history. Algorithms and chatbots now work alongside people, and artificial intelligence systems—those that never sleep—have become the backbone of modern banking operations. As the McKinsey report notes, AI is shaping everything from customer service to risk management. While this brings speed and accuracy, it also fuels concerns about job losses.
Artificial intelligence may feel new, but it is not a sudden revolution. It is simply the next step in a long line of digital transformations that began much earlier.
In the 1980s and 1990s, the introduction of Core Banking Solutions (CBS) automated many branch-level tasks.
By the 2000s, internet banking, ATMs and the widespread use of debit and credit cards reshaped how customers interacted with banks. The 2010s ushered in mobile banking apps, UPI, and digital wallets—turning banks into fully technology-led institutions.
Now, in the 2020s, AI has become the next defining chapter. It is not replacing the past; it is extending it.
This is the biggest question people worry about.
A McKinsey report estimates that 30% of banking jobs could be automated by 2030. A PwC survey shows that 60% of bank employees fear AI could replace them. The RBI, too, notes that AI will affect several roles in public sector banks, especially those involving clerical work, data entry, cheque verification, account updates and customer query handling.
But jobs are not vanishing—they are evolving.
Take the role of a credit officer. Earlier, the job involved collecting documents, checking eligibility and verifying details. AI systems can now do these tasks instantly and more accurately. What they cannot do is human reasoning, empathy, judgment or ethical decision-making. Those remain in the hands of officers.
Banks across the world are hiring for roles that never existed before—AI ethics officers, data scientists, cybersecurity specialists and human–AI collaboration managers.
According to the World Economic Forum’s Future of Jobs Report 2023:
(i) Demand for AI and machine learning specialists will grow by 40% by 2027.
(ii) Demand for data analysts will rise by 30%.
This shift means banking professionals cannot rely on old skill sets. They need new ones.
Banks must invest in training. HR teams need to run skill-gap studies, identify which roles require upskilling, and offer structured programmes in digital literacy, data management and AI readiness.
Global banks have already moved in this direction.
Citibank has launched a worldwide AI training programme.
HSBC has set up an AI Talent Development Academy with MIT and Stanford.
JPMorgan is training employees on internal AI tools.
In India, SBI has introduced AI learning modules for its staff, alongside the rollout of the SIA chatbot.
As AI becomes deeply embedded in banking operations, regulation cannot be an afterthought. Customer trust is the real currency of the financial sector, and protecting sensitive data is non-negotiable.
A clear regulatory framework is necessary to ensure that AI is used responsibly, ethically and transparently—without compromising customer confidence.
The next era of banking will not be built on technology alone. Efficiency may come from machines, but responsibility, empathy and trust remain human strengths. The sector needs a new social contract—one where AI and humans collaborate, not compete.
Customer service
Bank of America’s Erica has handled over two billion customer interactions since 2018. SBI’s Takaa manages millions of queries in real time. With generative AI, conversational banking is set to become even more natural and personalised.
Fraud detection & risk management
AI monitors transactions in real time, spotting unusual patterns and preventing fraud. AI-based credit scoring systems are proving far more accurate than traditional models.
Compliance & regtech
Banks such as HSBC and Standard Chartered use AI-powered AML systems to detect suspicious transactions. These tools reduce compliance costs while improving accuracy.
Investment advisory
Robo-advisors can now build portfolios based on an individual’s risk capacity. The Bank of England notes that AI-driven advisory could define the future of wealth management.
Back-office automation
JPMorgan’s COIN system reviews 12,000 contracts in seconds—a task that earlier required 3.5 lakh man-hours. AI is speeding up loan processing, reconciliation and document verification.
According to an RBI report, generative AI alone could boost operational efficiency in banks by 46%.
Artificial intelligence is no longer a distant future for banking. It is here, woven into the daily operations of banks across the world. The real challenge lies not in adopting AI, but in ensuring that technology and human values move forward together.
The future of banking will be built on the speed of AI and the empathy of humans—something no algorithm can replace.
{The author is the Chief Manager (HR) and Zonal HR Head of Bank of Baroda, Mangaluru Zone. This article is originally published in Dhanam Magazine's November 15, 2025 edition}
