AI, Credit Democratization, and change in deposit profiles to redefine the banking sector in the next decade: Report
- IBEF
- October 22, 2025
The future of the Indian banking sector will be defined by a mix of technological transformation and structural changes over the next decade, according to a report by Eiara Securities titled "Future of Banking - Seven structural forces shaping the next decade". The report highlights that AI and GenAI transition, changes in deposit profiles, and democratization of credit will be among the most significant forces shaping the industry between 2025 and 2035. Other key structural forces include productivity challenges, consolidation, and evolving business models to tackle new risks such as cyber threats and climate change. The report notes that the coming years will mark a "fight for relevance" for banks amid rapid transformation. While India's strong digital infrastructure and supportive government policies provide a solid foundation for growth, banks will need to address emerging challenges such as the integration of AI technologies, cybersecurity threats, and productivity issues.
The report observes that in the past two decades, Indian banks have successfully navigated several existential threats and focused on achieving scale. Between 2015 and FY25, the business growth, loan growth, and deposit growth of Indian banks stood at 1.7x, 1.74x, and 1.6x, respectively, surpassing the growth recorded between 1951 and 2015. The resilience of the Indian banking system has been built over time, having transitioned through early vulnerabilities. Despite extreme volatilities, both external, such as global challenges and the COVID pandemic, and internal, such as the asset quality review and demonetization, banks have emerged stronger. The report concludes that while the Indian banking sector enters a transformative phase, its ability to adapt to new technologies, manage risks, and leverage opportunities will determine its success in the coming decade.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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