India Stack and AI could transform access into empowerment
India has spent the past two decades building one of the most ambitious financial inclusion architectures in the world. With the foundational layers of Digital Public Infrastructure (DPI) in place, notably through India Stack, the country has enabled secure, paperless, and presence-less access to banking. But with basic access now largely achieved, the national focus is shifting toward a more complex objective: financial integration.
Unlike financial inclusion—which emphasizes access to formal financial services—financial integration involves embedding underserved populations into a dynamic, personalised financial ecosystem. This shift depends not just on expanding services, but on enhancing their relevance and affordability, especially for historically excluded communities. The key to unlocking this potential lies in combining the scale of DPI with the intelligence of artificial intelligence (AI).
AI can personalise finance and streamline operations
AI technologies—including machine learning (ML), natural language processing (NLP), generative AI (GenAI), and predictive analytics—can reduce cost barriers, improve user engagement, and detect fraud in real time. According to McKinsey, AI could unlock $200–340 billion in annual value for the financial services industry in India, equivalent to 2.8–4.7% of total industry sales. Crucially, this impact isn’t limited to the top end of the market—it has the power to redefine service delivery for underserved segments.
AI-enhanced tools can tailor credit scoring models for informal income earners, deploy chatbots in regional languages to improve customer support, and reduce underwriting risk by analyzing alternative data. As AI becomes more accessible and affordable, it enables financial institutions to rethink their outreach and serve customers with a level of personalization previously thought impossible at scale.
Aadhaar and AI: A new frontier in onboarding
India Stack’s Identity Layer, built on Aadhaar, has already slashed the cost of customer acquisition—from $12 to just $0.06, according to the IMF. Additional innovations like Central KYC and Video KYC have created further efficiencies. These systems are now being enhanced by AI-powered facial recognition and verification tools, drastically reducing onboarding friction while ensuring compliance and security.
This infrastructure allows banks and fintechs to deploy AI models that analyze biometric and demographic data to speed up loan disbursement and provide dynamic credit lines. It also paves the way for AI-driven anti-fraud systems that can flag anomalous transactions or behavioral patterns in real time—reducing loss and improving trust in digital systems.
The road ahead: Policy, privacy, and scale
India’s transition from inclusion to integration hinges not only on technology but on responsible governance. Regulatory bodies will play a crucial role in ensuring that AI deployments align with data privacy standards and do not replicate systemic biases. The interplay between open digital platforms, private innovation, and strong regulatory oversight will define whether this transformation deepens access or fragments it further.
If executed with care, India could set a global precedent—not just in connecting people to financial systems, but in ensuring that those systems actively work for them. Integration, not just inclusion, may be the next great leap in digital finance.
