Indian banks are benefiting from ongoing credit growth, improved digital public infrastructure, the widespread implementation of AI-driven operating models, and increased regulatory attention on climate risk, cybersecurity resilience, and governance.

KPMG International’s study found that the industry is on par with its global counterparts in terms of scaling from pilots to business AI applications, making investments in workforce reskilling, and improving cybersecurity and ESG frameworks to promote long-term resilience.

According to a poll of 110 CEOs of the world’s banking and capital markets, 83% are optimistic about growth over the next three years, and 65% consider AI to be a key investment priority.

Seventy percent of CEOs intend to invest 10–20% of their budgets for the following 12 months in AI, while 59% anticipate that agentic AI will have a revolutionary effect, and 69% anticipate that it will pay off in one to three years.

Reskilling for AI is a high priority for about 83% of bank and capital market CEOs; 79% claim that AI has changed the definition of entry-level skills, while 78% issue caution. artificial intelligence If ignored, workforce readiness could have a detrimental effect on the organization, according to the study.

According to Sanjay Doshi, Partner and Head of KPMG in India’s Transaction Services and Financial Services Advisory, “the same imperative is increasingly shaping the Indian banking industry as global banking leaders respond to rising operational and regulatory costs by pursuing scale and strategic M&A. ”

For India, scale is more than just size; it’s a catalyst for growing distribution, speeding up digital transformation, and improving cost effectiveness, according to Doshi.

According to him, targeted integration and partnership-led growth can unlock new markets, reinforce value propositions, and establish long-term competitive resilience as banks increase their investments in technology and modernize their operational models.

Data preparedness and regulatory gaps were listed by 55% of CEOs as the biggest obstacles to growth, followed by ethical concerns at 56% and cybersecurity at around 86%.