New Delhi, March 13 (IANS) Indian banks are benefiting from sustained credit growth, deeper digital public infrastructure and rapid adoption of AI‑driven operating models, and heightened regulatory focus on climate risk, cyber resilience and governance, a report said on Friday.

The report from KPMG International said the sector is at par with global peers scaling from pilots to enterprise AI use, investing in workforce reskilling and strengthening cybersecurity and ESG frameworks to support long‑term resilience.

Based on a survey of 110 global Banking and Capital Markets CEOs, the report found 83 per cent are confident about growth over the next three years and 65 per cent ranked AI as a top investment priority.

Around 70 per cent CEOs said they plan to allocate 10–20 per cent of next‑12‑month budgets to AI, while 59 per cent expect agentic AI to have a transformational impact and 69 per cent expect returns within one to three years.

“Around 83 per cent banking and capital market CEOs are prioritising reskilling for AI; 79 per cent say AI has redefined entry‑level skills whereas 78 per cent warn AI workforce readiness could negatively impact the organisation if not addressed,” the report said.

“As global banking leaders respond to rising operational and regulatory costs by pursuing scale and strategic M&A, the same imperative is increasingly shaping the Indian banking sector,” said Sanjay Doshi, Partner and Head, Transaction Services and Financial Services Advisory, KPMG in India.

Doshi said that scale is more than just size for India but a catalyst for expanding distribution, accelerating digital transformation and enhancing cost efficiency.

As banks deepen their investments in technology and modernize their operating models, selective consolidation and partnership‑led growth can unlock new markets, strengthen value propositions and build long‑term competitive resilience, he added.

Around 86 per cent CEOs cited cyber insecurity as the top growth threat, 56 per cent cited ethical challenges, and 55 per cent pointed to data readiness and regulatory gaps.

—IANS

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