Financial services sector must grow 20 times towards $30 trillion GDP goal by 2047: Report

Mumbai, Sep 5
In order to achieve a $30 trillion GDP by 2047, India will require a 20 times growth in the financial services sector, with banks playing a pivotal role, a report showed on Thursday.

Future growth will require $4 trillion of capital base in banks, one-third of which will have to be fresh capital deployment, according to the report by Boston Consulting Group (BCG) in association with FICCI and Indian Banks’ Association.

India's banking system is in a strong position today acting as an ideal launchpad for the ‘Viksit Bharat’ mission.

“It will have to build for the next 2 decades through structural shifts – growing deposits, enhancing asset quality, and improving productivity, while advancing digital capabilities and future competencies,” explained Ruchin Goyal, managing director and senior partner at BCG.

“To fuel inclusion and credit growth, we must continue to innovate and reimagine our deposit strategies, aligning them more closely with the evolving needs and preferences of our customers,” according to MV Rao, Chairman at Indian Banks’ Association.

The report highlighted key structural themes that banks need to work on for continued success of Indian banking sector.

These are the future of household savings, addressing challenges with asset quality and pockets of leverage, take a bold vision on productivity, continue investing to drive digital funnel growth, along with focus on building future capabilities.

India’s Digital Public Infrastructure (DPI) has laid the foundation for a strong and resilient financial infrastructure and accelerated the pace of digitisation.

“It is now about taking capabilities to the next level and building for the next two decades - resilience, climate and cyber security needs to be strengthened, with centralised, real-time network and specialized talent,” said Jyoti Vij, Director General at FICCI.

The Indian banking system has made significant strides in building future-ready competencies but must embrace the next wave of opportunities.

Resilience must extend beyond technology to encompass entire business processes. Banks face a "GenAI paradox," struggling to scale initiatives beyond pilots.

“Climate risk presents both threats and a $2.5 trillion financing opportunity, demanding a shift in operating models. Additionally, India’s banks must tackle increasing cyber risks, necessitating a centralised, real-time network and specialised talent to mitigate threats,” the report mentioned.