BFSI Firms Remain Unprepared for AI Era

 Hyderabad: A lack of digital-ready leadership, poor data fluency, and weak learning systems are dragging down financial institutions, despite soaring ambitions to embrace artificial intelligence and digital tools.

A new report reveals that only 27 per cent say they are actually prepared for the transition towards an AI-led era even though 93.3 per cent of BFSI companies consider data to be critical and 78 per cent are actively exploring generative AI. BFSI is an acronym for banking, financial services, and insurance.

The 2025 Workforce Insights: BFSI Industry Report, which was released by learning-tech company Knolskape, draws its insights from over 6,500 employees and 35 financial institutions across geographies.

The report reveals a “disconnect between ambition and execution” in Indian BFSI organisations that are chasing digital transformation without addressing deeper structural issues.

“The pace of change is dramatic, but it brings urgent challenges. About half the BFSI workforce will need reskilling in the next few years,” said Harini J., a senior executive in the learning and development (L&D) division of a top financial firm in the city. “Unfortunately, too many institutions are still working with outdated learning frameworks.”

The study finds that while 86.7 per cent of organisations rank leadership development as critical, most current programmes do not address the demands of AI-driven, tech-intensive environments. The digital readiness gap is stark: 83 per cent list digital transformation as a top priority, but only 31 per cent believe their workforce is ready to deliver on it.

While 93.3 per cent of firms say data and analytics are mission-critical, just 33.3 per cent claim to use them effectively in learning or performance management. Knolskape identifies this underutilisation of data, paired with poor leadership alignment and outdated talent strategies, as key barriers to digital adoption.

Another L&D officer at a private bank said the lack of preparedness was not due to resistance to technology, but to “confused mandates, short-term priorities, and the absence of agile learning frameworks.”

The report also shows that only a minority of firms are investing in simulation-based learning, AI-powered training models, or digital leadership labs, despite these being cited as high-impact methods by industry leaders. Emotional intelligence, adaptive thinking, and decision-making in data-rich environments are emerging as core skill gaps.

Without urgent investment in people, experts warn, the BFSI sector may miss its window to remain globally competitive. “Technology alone will not drive change. It’s people who do,” the study said.