AI to Wipe Out the Traditional BFSI Back Office Within Three Years? Check Study

A new study reveals that India’s BFSI sector is rapidly moving toward AI-driven back offices, with 57% expecting AI agents to handle most routine tasks within three years.

A new study by Iron Mountain and HFS Research, “The Zero Office: Reinventing the Banking Back Office as a Growth Engine,” reveals that India’s banking, financial services, and insurance (BFSI) sector is undergoing a seismic shift, driven by AI, automation, and predictive compliance. The survey, which gathered insights from over 500 senior executives across seven countries, including India, shows a widening gap between ambition and execution.

In India, half of BFSI leaders believe the traditional back office will cease to exist within three years, replaced by modular APIs, SaaS workflows, and AI-driven autonomy. 57% expect AI agents to handle over three-quarters of routine operations, while 83% warn that delaying digitization could mean permanent competitive irrelevance.

However, progress remains uneven. Only 35% of organizations have achieved real-time, predictive compliance, and 31% cite skill gaps as the biggest barrier. Nearly 50% depend on joint vendor partnerships for transformation, highlighting the critical need for ecosystem collaboration.

Despite challenges, confidence is rising. 41% of BFSI leaders expect roles to shift from transactional work to strategic decision-making, while 35% have initiated large-scale reskilling programs. Investment appetite is strong—23% plan to spend between $10 million and $25 million on digital transformation in the next two years, and one in five aims to exceed $50 million.

Share on