Can Banks and Insurers Really Keep Up? Why Agentic AI is the Missing Link in the BFSI Marketplace
By : Pravin Vijay
Vice President-Marketing
Have you ever wondered why so many banks and insurance companies struggle to expand customer relationships, even while launching new apps, products, and offers every other month?
The BFSI world is a tough marketplace. Customers and their financial needs are changing faster than ever, Fintech startups are eating away at traditional players, and regulations keep shifting the goalposts.
So here’s the big question: How do you make the right decisions involving customers, products, and business interests when all three are moving targets?
The truth is, decisions about what product to offer, how to price it, or when to reach out to a customer are no longer routine. They directly affect revenue, customer experience, and even long-term survival. And increasingly, those decisions are too complex for humans or even traditional AI to handle alone.
What Makes the BFSI Marketplace So Hard to Navigate?
Customers Who Change Their Minds Overnight
Think about your own behavior with banks or apps. Do you expect instant answers on chat? Do you want personalized offers instead of generic emails? You’re not alone.
62% of banking customers are open to AI-driven personalized alerts, such as fee avoidance, and 42% would accept product recommendations from an AI agent (J.D. Power).
Banks that fail to personalize risk losing those same customers to Fintech firms that will.
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A Jungle of Products
Savings accounts, credit cards, micro-insurance, wealth management, digital wallets. The list keeps growing, and BFSI firms now manage dozens of product lines. But the real challenge is:
- Which products should be cross-sold together?
- When is the right time to pitch a loan vs. a credit card?
Here’s where the problem deepens. A McKinsey study found that only 7% of banks are fully exploiting critical analytics tools in practice. Most decisions are still being made without comprehensive, real-time insights (McKinsey).
The Fintech Tsunami
Everywhere you look, Fintech firms are gaining ground. Their advantage lies in simplicity and speed. They roll out products faster, deliver sleek digital experiences, and focus on underserved segments.
Traditional banks have size and a history of customer relationships on their side. But without smarter, faster decision-making, even these advantages fade.
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Business Goals That Keep Shifting
In BFSI, business priorities do not stand still. One year, the focus is growth, the next it is profitability, and then compliance takes center stage. Each shift directly affects how banks and insurers deal with customers and products:
- When margins tighten, the emphasis is on cross-selling more products to existing customers and protecting high-value relationships.
- When compliance rules change, leaders must quickly adjust how products are structured, priced, and marketed, while still keeping the experience simple for customers.
- When growth returns to the top of the agenda, the pressure is on to launch new products quickly and win adoption before competitors or Fintech challengers do.
A Citi report predicts that AI could add $170 billion in profit to the global banking sector over the next five years, raising profits from $1.4 trillion in 2023 to nearly $2 trillion by 2028 (Financial News London).
The takeaway is clear: without AI-driven decisioning, banks will struggle to keep business priorities, product strategies, and customer expectations aligned.
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Why Decision-Making Assisted by AI Isn’t Enough
Many BFSI firms already use AI to support their decisions. On paper, it sounds like the problem is solved. AI highlights churn risks, forecasts product demand, or recommends which customers to target. But in reality, even AI-assisted decision-making still leaves critical gaps:
- AI stops at insights. It tells you what might happen, for example, which customer is likely to close an account, but it does not take the next step to design or trigger the retention action.
- Models do not adapt fast enough. Traditional AI models often need to be retrained manually, which means they lag behind fast-moving shifts in customer behavior or product uptake.
- Execution depends on humans. Dashboards and reports still require teams to interpret, debate, and act, slowing down the response. By the time action is taken, the customer opportunity may be gone.
- Alignment with broader goals is fragmented. AI might optimize for a single metric like reducing churn but miss the bigger context such as profitability, compliance, or growth priorities.
In other words, AI-assisted decision-making improves visibility but does not close the strategy-to-execution loop. Leaders still face the same challenge: knowing what should be done but struggling to actually do it at speed and scale.
As Deloitte points out, most banks cite data accuracy, usability, and access as their biggest hurdles. This is a clear sign that traditional AI has not yet solved the execution problem (Deloitte Banking Analytics Survey 2024).
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The Missing Link: Agentic AI
This is where the next leap comes in: Agentic AI. Unlike traditional AI, Agentic AI does not stop at telling you what might happen. It helps make sure the right actions are actually carried out.
Agentic AI can solve some of the toughest complexities in BFSI:
- Customer dynamics: If a customer shows signals of churn, Agentic AI will not just flag it. It will create a tailored retention strategy, trigger the right outreach, and adjust based on how the customer responds.
- Product complexity: With dozens of offerings, banks often struggle to match the right product to the right customer at the right moment. Agentic AI can simulate product bundling, test pricing scenarios in real time, and automatically adjust campaigns to improve uptake.
- Competitive speed: Fintech firms move fast. Agentic AI enables banks to match that pace by adapting tactics instantly, whether it is launching a new digital wallet campaign or optimizing cross-sell for wealth management products.
- Shifting business goals: If the focus shifts from growth to profitability, Agentic AI can redirect strategies to push higher-margin products or lower servicing costs without waiting for human teams to reset models.
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Think of it this way: traditional AI might tell you that a customer is about to leave. Agentic AI will not only spot it, but also design the right retention strategy, personalize the outreach, trigger it instantly, and then learn from the result.
That is the difference between AI that informs and AI that acts.
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From Surviving to Thriving in BFSI: with Agentic AI
The BFSI marketplace will only grow more complex. Customers will demand more, product portfolios will expand, Fintech firms will push harder, and business goals will keep shifting.
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So, here is the real choice for leaders:
- Keep making decisions the old way, with partial insights and delayed execution.
- Rely on traditional AI that predicts but does not act.
- Or embrace Agentic AI, the new class of AI that collaborates, executes, and drives measurable results.
The future of BFSI belongs to those who adopt Agentic AI. Because in a world where every decision impacts customer experience and revenue growth, you do not just need AI that thinks, you need AI that does.
Check out Maximising Customer Lifetime Value for Financial Service Providers
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Also Read:
Banking on AI: The Journey from Transaction to Interaction
Top 5 AI Trends to Impact CX in 2025
Read how a microlending service provider generated higher loan inquiries and increased average monthly collection by more than 6% by a personalized onboarding journey.
