A company’s annual report can do more than share information for compliance; it can outline a vision. Warren Buffett turned Berkshire Hathaway’s letters to shareholders into investment literature. Indian companies are slowly adopting that idea. HDFC Bank’s latest annual report for the financial year 2025-26, titled ‘Harnessing AI in Banking’, does the usual job of highlighting the largest private-sector bank’s balance-sheet strengths. But it also offers a peek into the future of AI in banking. The 629-page report mentions “GenAI” 45 times, while “artificial intelligence” appears 22 times. HDFC Bank claims to have implemented many solutions under
Personal banking
The waiting time for loans has shrunk rapidly. Turnaround times for credit card applications and digital loans have been reduced to real time (nearly) for specific use cases. An AI-powered business rule engine with automation process pipelines accepts or rejects applications. Bots are trained to intervene when you get tired of filling out complex digital banking applications. For example, if you are filling out a digital form and drop out of the transaction, a bot will call you and hand-hold you through the process.
If you have a problem with your banking services, AI will now detect your intent behind a complaint. To tackle customer complaints at an early stage, banks are integrating AI into customer relationship management processes.
The report also highlights AI-related risks that can affect you as a customer. Automated decisions may lead to inconsistent or unfair results if not properly monitored, said the report. “There is also a risk of reduced transparency where decisions are not easily explainable,” it added. To improve communication with you, HDFC Bank’s management has stated that the bank is increasing investments in AI. They are spending money to empower bank employees who interact with you by equipping them with better tools and knowledge to resolve disputes.
If you are an investor
HDFC Bank shareholders continue to live on hope. The bank’s share price has barely moved in five years. By contrast, the share prices of comparable large banks, such as SBI and ICICI Bank, have more than doubled during that period. In response to the competitive interest-rate environment for loans, HDFC Bank's annual report highlights a significant push to boost non-interest income.
The fee-based income grew at three times the rate of the core interest income from loans.
HDFC Bank is using digital outreach to existing home loan customers of the former HDFC Ltd after the merger, and cross-selling products such as credit cards, stockbroking services, mutual funds, and insurance.
The bank’s SmartWealth app crossed over 15 lakh downloads with Rs 6.36 lakh crore in wealth assets under management. The report boasts of 850,000 premium clients.
All of that is possible because the bank can use AI to analyse the data it collects from customers. Advanced customer analytics helps identify the right customer, the right channel to reach them, the right products to offer, and the right personalised communication. The bank also prioritises leads it receives from you when you fill in the online request forms. Your entire journey or footprint is captured when you use banking or other services and look up information, which the bank calls digital engagement and drop-off patterns.
HDFC Bank used to be a pioneer in technology-led banking. Now, the bank’s annual report suggests that artificial intelligence is available not only to the largest private-sector bank but also to its competitors. Investors seem to have realised that and pushed up rivals. The previous metric for measuring bank performance was the net interest margin. Simply put, it is the difference between the cost of funds and the cost of lending for banks. However, AI has made it less relevant by boosting the fee-based income. It appears that technology is helping banks not only to boost lending but also to distribute financial services products in a big way.
