IDFC FIRST Bank CEO V Vaidyanathan On How AI Will Make Banking Predictive

AI-first banking will move the sector from reactive customer service to predictive experiences, the CEO said at the Inc42 AI Summit

IDFC FIRST Bank is using AI across underwriting, document intelligence, employee assistance, and customer support

The bank’s customer deposits grew 7x from about ₹38,400 Cr in FY20 to ₹2.84 Lakh Cr in FY26

For decades, banking evolved from paper-heavy operations to digital interfaces. A data-heavy industry, where we have seen banks are still trying to figure out the unstructured data, a bank that could solve for an AI-first banking experience with all the data they’re sitting on could be the winner.

In a fireside chat at Inc42’s AI Summit 2026 in Bengaluru, IDFC FIRST Bank MD and CEO V Vaidyanathan agreed to the notion. “The next phase will be defined by AI capable of understanding, predicting, and acting before customers even raise a request,” he said.  

For context, IDFC FIRST Bank seems to have a good growth curve, where customer deposits stood at ₹2.84 Lakh Cr in FY26, up from nearly ₹38,400 Cr in FY20. Vaidyanathan believes that combining the intent to be customer first with technology was the only way to get to this milestone. He attributed this to the bank’s tech-first culture from the very get-go. 

“Our magic carpet is technology. If we had gone the traditional way, we would not be anywhere close to the growth we have seen in the past seven years,” he said.

The IDFC FIRST Bank CEO pointed to a future where banks proactively solve customer problems instead of waiting for support calls.

“If your card gets declined overseas, the bank already knows what happened. Instead of asking security questions, the system can directly tell you to switch on international payments. Or even better, inform you before you call,” he said, adding that such predictive workflows are already becoming a ground reality.

Further, he believes that AI is also expanding banking access and inclusion in India, especially for customers without formal credit histories. While cashflow-based lending improved underwriting for informal workers, generative AI can now analyse behavioural and transaction-level patterns far more deeply.

Internally, the bank has been deploying classical AI systems for nearly 15 years and GenAI capabilities for the last two to three years. Current use cases include document intelligence systems that classify and analyse documents, as well as internal LLM-powered knowledge assistants connected to SOPs, policies, and regulations.

[Edited by Nikhil Subramaniam]

Source: Inc42 - Startups