AI reshapes NBFCs as firms automate lending, collections, and compliance, but rule out mass layoffs
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Artificial intelligence (AI) is rapidly moving from pilot projects to the core of operations across India's non-banking financial companies (NBFCs), with lenders increasingly using the technology to improve underwriting, collections, fraud detection, and customer service. While AI is helping boost revenues and reduce operating costs, industry executives say the technology is augmenting employees rather than replacing them, with human judgement continuing to remain critical in financial services.
The broader shift comes as financial institutions accelerate digital transformation amid rising competition and growing customer expectations. According to McKinsey, generative AI could add between $200 billion and $340 billion annually to the global banking sector through higher productivity and efficiency, with customer operations, software engineering, marketing and risk functions among the biggest beneficiaries.
Among the early adopters, Jio Financial Services says it has built its business as an AI-native institution from inception. The company has deployed an enterprise-wide network of around 130 intelligent AI agents and has already piloted more than 14 agentic AI use cases across risk, compliance and audit.
"Jio Financial Services, which commenced operations around three years back, is built as an AI-native institution, with AI embedded across our operations. Our vision is to make intelligent finance accessible to every Indian, and do so in the most efficient and cost-optimised manner. AI is central to delivering that vision," Ganesh AR, Group Chief Technology Officer, Jio Financial Services, told Fortune India.
According to Ganesh, AI has significantly improved customer experience as well as operational efficiency. The company's JioFinance app uses data analytics and agentic AI to personalise product recommendations, with around 10 propensity engines analysing over 800 behavioural attributes to suggest relevant financial products.
AI-powered video interactions with borrowers have reduced credit assessment turnaround time by 76%, while voice bots are being deployed across insurance and partner services.
The company said AI is contributing to both revenue growth and cost savings. "Our enterprise-wide digital platforms have reduced manual effort by up to 40%, while our Agentic AI initiatives across risk, compliance and audit are targeting a 30% reduction in operational costs," Ganesh said, adding that AI is also helping automate settlements, reconciliation, compliance and fraud management while enabling the company to handle higher transaction volumes with a lean operating model.
Another AI-first NBFC, Piramal Finance highlighted similar gains across its lending operations. The company said it currently has more than 50 generative AI use cases running across underwriting, fraud detection, collections and customer service, while investing in agentic AI architectures and in-house AI models.
Its internally developed voice platform conducted over 4,000 AI-led interviews in the last quarter, while AI adoption across operations has accelerated sharply.
During FY2026, the company's generative AI token usage increased five-fold from the corresponding period last year. Over the past two years, operational productivity has nearly doubled despite a largely stable workforce. Its AI-driven Intelligent Collections platform increased hands-free monthly collections nearly 12-fold, from ₹84 crore in the first quarter of FY26 to ₹1,019 crore in the first quarter of FY27.
The company said AI is directly contributing to business growth.
"Our voice AI Platform enabled ₹33 crore of disbursals last quarter. The Collections use case discussed previously is also directly affecting our P&L with more than ₹1,000 crore of hands-free collections being done monthly," Saurabh Mittal, Chief Technology Officer, Piramal Finance told Fortune India.
No mass layoff in NBFCs are expected
Despite AI's growing capabilities, both companies ruled out workforce reductions linked to automation.
"We see AI as a force multiplier that enables our people to focus on higher-value work by automating repetitive tasks, accelerating decision-making and improving productivity. Our approach is centred on human-machine collaboration, with strong governance and human oversight built into our AI-led workflows," Ganesh said.
Piramal Finance echoed the view, saying, "Our philosophy has always been to use AI to augment people, not replace them." It added that its AI assistant handled over 300,000 employee queries in the last quarter, while AI also enabled the company to independently recruit more than 260 entry-level sales executives, with human intervention limited to the final offer stage.
Industry executives believe routine, rules-based activities such as document verification, compliance checks, KYC processing, fraud detection, and data analysis will see the highest levels of automation in the coming years.
However, they argue that customer relationship management, strategic decision-making, governance, risk oversight and underwriting that requires local market understanding will continue to depend heavily on human expertise.