The AI Challenge in BFSI: Preparing humans to lead alongside machines

For decades, careers in banking and financial services were built on structured education pathways, clearly defined roles, and strong domain expertise. Professional growth followed predictable patterns, shaped largely by regulatory requirements and stable operating models. Today, that equilibrium is being unsettled. Rapid technological change with the growing use of AI, evolving customer expectations, and India’s massive workforce scale are compelling the sector to rethink how it prepares people for work.

AI is no longer a peripheral technology in financial services. It is already embedded in core functions such as fraud detection, credit assessment, customer service, and compliance. Yet as the sector looks ahead to 2026, the challenge is shifting from technology adoption to workforce preparedness.

An industry survey indicates that while 67% of financial services organisations consider AI and cultural readiness critical, only 27% believe they are adequately prepared. This gap highlights a fundamental concern: the pace of technological change is outstripping humans’ ability to adapt, reskill, and work confidently alongside AI.

From AI ambition to workforce reality

The disconnect becomes clearer when viewed through the lens of skills and leadership. Although nearly two-thirds of organisations rate AI readiness as a high strategic priority, far fewer express confidence in their ability to execute effectively. The reason lies not in the absence of tools, but in the shortage of AI-ready leaders, data-capable professionals, and learning frameworks that can keep pace with continuous change.

This shift has important implications for how skill development is approached within the BFSI sector. Learning and Development functions, once limited to compliance training and role-specific instruction are increasingly being repositioned as strategic enablers of organisational change.

Industry findings show that 86.7% of financial services organisations now place leadership and management development at the top of their learning priorities, ahead of even digital skills. This is followed by a strong emphasis on building a continuous learning culture (73.3%) and strengthening organisational agility and adaptability (66.7%).

The significance of these priorities becomes clearer when viewed against the realities of AI-driven work. In areas such as credit assessment or fraud monitoring, human professionals remain essential for oversight and responsible decision-making. Similarly, as customer interactions become increasingly automated, employees must shift from transactional roles to problem-solving and relationship-driven responsibilities.

This changing nature of work explains why organisations are reassessing what it means to be “skilled” in the AI era. While digital literacy remains essential, there is growing recognition that technical proficiency alone is insufficient. Greater value is now being placed on decision-making, critical thinking, collaboration, and the ability to manage change capabilities that enable individuals to work effectively alongside intelligent systems rather than be displaced by them.

Redefining employability and leadership in financial services

The changing nature of work is also redefining employability in financial services. Traditionally, employability was closely linked to domain knowledge and regulatory expertise. While these remain important, industry research shows that leadership, digital, managerial, and soft skills now rank higher than domain and compliance skills in workforce development priorities.

AI is not eliminating roles en masse, but it is reshaping them. Employees are increasingly expected to work alongside intelligent systems — interpreting data, questioning algorithmic outputs, and applying human judgement where context and ethics matter. As per our report findings, in 2026, BFSI leaders rank emotional intelligence and empathy as the most critical leadership capabilities (17.2%), followed closely by ethical leadership and governance (15.4%). As AI enters credit decisions, collections and underwriting, these human capabilities become guardrails for fairness, accountability and trust not soft traits.

Despite clarity on priorities, several barriers continue to slow progress. Two-thirds of organisations cite budget constraints as a major challenge, while 60% struggle to measure the real impact of learning initiatives. Additionally, 40% report skill gaps within their own learning and development teams, limiting their ability to design and deliver modern, AI-enabled learning experiences. These constraints highlight the need for more coherent strategies that align education, employability, and business outcomes.

As the BFSI sector moves towards 2026, the central challenge is no longer whether AI will transform financial services; it already has. The more pressing question is whether humans can keep pace with this transformation. Building workforce readiness will require sustained investment in leadership development, continuous learning, and ethical capability-building. It will also demand a fundamental shift in mindset from viewing learning as a one-time qualification to recognising it as a lifelong responsibility shared by individuals and institutions alike.

In an industry built on trust, judgment, and accountability, technology alone cannot define the future. That future will be shaped by organisations that treat human capability as a strategic asset developing leaders who can question algorithms, guide change, and apply AI with responsibility and empathy. Those who succeed will not merely adopt intelligent systems; they will build intelligent, resilient workforces capable of leading financial services through its next era.

(Rajiv Jayaraman, CEO & Founder of KNOLSKAPE)

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Published – January 09, 2026 02:23 pm IST