Recently, I was part of a retail summit where a speaker from a leading café chain told me that they almost know exactly what kind of tea each customer prefers, thanks to AI. I asked him, “Adrak wali, kadak, bina ya kam shakkar ki?” He laughed and said yes. AI is permeating every sector.
Social media is flooded with posts like: “You’re losing out if you’re not using AI!” “Still using PDFs and wasting time?” “Use these simple tricks to land a job!” “5-day challenge: How AI will change the world”.
I often think AI is the most widely discussed technology today. Whether in work or personal life, everyone wants to add a layer of AI to their profile. But what real impact is AI making in the finance sector, and is it truly adding value to the economy? Here is my view.
Also Read: Over-regulation of generative AI could stifle innovation and efficiency, says Happiest Minds CFO Venkatraman Narayanan
AI in banking and finance
Banks and financial institutions are leveraging AI to analyse customers better and assess potential risks. Many mundane processes are already automated.
But there are two big questions CXOs are facing now. First, how to extract business value and justify the ROI on AI. The second is how to find skilled people and how to retain them. There are thousands of case studies, some even bizarre. A banker once told me they had developed an algorithm that analyses a customer’s clothing choices. If a customer frequently wears red or favours red, the system suggests they might be more likely to default—affecting their credit score.
Similarly, CFOs and business heads now use AI-powered spreadsheets that provide a consolidated view of their entire supply chain on a single dashboard. While all this is happening, the bigger question remains: Will AI truly create a business impact? My answer isn’t a clear yes.
Many new-age businesses—startups, fintech firms, e-commerce, and quick-commerce players—are built entirely on AI. But even companies that are 5–7 years old are burning cash without significant progress in profitability and sustainability. A few exceptions, like Uber, exist, but most remain uncertain whether today’s AI-driven solutions will remain relevant tomorrow.
For instance, we are delivering products in 10 minutes. Even an airplane cannot deliver at this speed Yet, these startups struggle to sustain their operations profitably.
On the flip side, what I strongly believe is these businesses have created low-paying jobs that often exploit workers. Imagine a young delivery executive riding a bike all day, constantly on his toes to meet delivery deadlines. Is he compensated fairly? The less said, the better.
Many think that just because they have access to data, they can build AI solutions. In India, getting data is as easy as getting water. But does that automatically translate into effective AI?
Also Read: AI will push accountants toward a more supervisory role, create new opportunities, say EY experts
Empowering customers with AI
AI has the potential to revolutionise customer service. However, it also raises concerns about over-empowering customers.
For example, do all banking, insurance, and AMC customers speak and write English fluently? Do all customers have smartphones?
Millions of Indians neither own a smartphone nor understand English or the complexities of mobile apps. Yet, from BFSI to restaurants, from car dealerships to grocery stores—everyone expects them to download an app.
Are we giving them a power they don’t fully understand—one that could be exploited by smart hackers?
AI and job loss
The biggest fear surrounding AI is job loss. As AI automates mundane tasks, many front-office jobs will vanish—this is undeniable.
However, the biggest challenge is businesses will have to train employees to ensure they evolve with technology because you also need people to use new-age technologies. This means there will be new jobs which never existed earlier, such as data scientists, and algorithm analysts. But are we preparing the workforce for this shift?
Core issues
If AI is a game-changer then we should look at the core issues. For example, half the bank branches are still suffering from server problems. Importantly, many of the staff members themselves don’t know the products they offer. The majority of the real customer issues are not part of the IVR and automated caller tunes. Whether you call a bank, a telecom provider, or a car company, you’ll likely struggle to get human assistance. Can AI truly help in such situations?
Let’s not forget that companies often take advantage of labour arbitrage—hiring low-skilled workers desperate for jobs and underpaying them while assigning them multiple roles.
A human resource officer of a firm once told me that they onboard new employees remotely while they work from home. I asked, “Great! But how do you provide them with a laptop? And how do you replace it when needed?”
He fumbled—his perfect onboarding process overlooked basic logistical challenges.
AI is important and will undoubtedly strengthen and scale businesses. Every CXO is spending enough time deliberating and building the next-level product for sure. But my view is, we might not need AI everywhere. There is a high chance that AI might not be the solution to every business problem.
We are also forgetting that data is still unorganised.
I’d be happy if a cafe used AI to blend the perfect combination of tea, sugar, and milk. But at the end of the day, I’m human.
Sometimes, I crave filter coffee—or a Vietnamese coffee with a cheesecake.
AI generates reports and decisions are made based on those reports. But what is the actual success rate?
We don’t need to define it—because human moods and minds constantly change. Humans think differently in different situations due to parapsychological factors. Similarly, global problems keep evolving.
Once, forex and oil prices were the biggest concerns. Today, alongside those, Trump is another big global variable.
The world will continue facing new challenges. How much AI will help resolve them we really don’t know.
(Editor’s note is a column written by Amol Dethe, Editor, ET CFO. Click here to read more of his articles exploring several buzzing topics)
