Archive · 3 Sep 2026
Indian Banks Expand AI Use Despite Limited Technology Spending
Indian banks are using artificial intelligence for tasks such as lending, customer service and fraud detection.
A survey by Zeta asked 40 leaders from 18 banks and non-bank financial companies about their AI use.
Most of these institutions spend less than one-tenth of their new technology budgets on AI.
Still, many banks have moved some AI systems into regular use.
Security and protecting private data are the biggest worries.
AI appears to be helping most in retail lending and customer service.
Banks also want to use AI more for credit checks and spotting fraud quickly.
However, most banks are still developing safety rules, and none said those rules were fully implemented across the organization.
Most surveyed Indian banks and NBFCs allocate less than 10% of new-project technology spending to AI.
Zeta’s 2026 survey found 70% of chief data officers reported selective or scaled AI deployment, including 30% at scaled deployment.
Security and data privacy were identified as the leading barriers to expanding AI, cited by roughly three-quarters of technology and risk leaders.
AI is having its strongest reported impact in retail lending, customer service, CASA operations and back-office work.
Banks are prioritizing AI credit-risk models, early-warning systems and real-time fraud decisions, but responsible-AI and model-risk controls remain incomplete.
- Who
- Indian banks and non-banking financial companies, as surveyed through responses from 40 CXOs across 18 institutions by Zeta.
- What
- Financial institutions are expanding AI use while allocating limited technology spending to it and developing related risk controls.
- When
- The findings come from Zeta’s 2026 CXO survey; banks identified priorities for the next 18–24 months.
- Where
- India’s banking and non-banking financial sector.
- Why
- Institutions are pursuing AI for lending, customer service, fraud detection, risk management and operational efficiency, while security and data privacy concerns limit expansion.
- Survey
- Zeta’s 2026 CXO survey
- Sample
- 40 CXOs across 18 leading Indian banks and NBFCs
- AI spending
- Most institutions allocate less than 10% of new-project technology spending to AI
- Deployment
- 70% of chief data officer respondents reported selective or scaled deployment; 30% reported scaled deployment
- Main barriers
- Security and data privacy, identified by roughly three-quarters of technology and risk leaders
- Reported impact
- Retail lending: 88%; customer service: 75%; CASA and back-office operations: 63% each
- Governance
- About 60% said responsible-AI frameworks were under development; none reported organization-wide implementation