New Delhi: India's fintech sector is entering a new phase, with Artificial Intelligence (AI) moving beyond automation and analytics to become a strategic tool for executing and improving financial services, according to an ASSOCHAM-KPMG in India report.

The knowledge paper, ‘Beyond Digital Infrastructure’, released at the 3rd India International Fintech Festival, said India's strong Digital Public Infrastructure (DPI), expanding connectivity and growing data ecosystems provide a strong foundation for large-scale AI adoption.

Digital identity, real-time payments, consent-based data sharing and secure digital records are enabling financial institutions to integrate AI into customer services, fraud detection, compliance, risk management and decision-making.

The report identified key priorities including expanding computing capacity, strengthening privacy and cybersecurity frameworks, and increasing AI adoption in lending, underwriting and claims processing. It also called for voice-based and regional-language interfaces to make digital financial services more accessible.

KPMG in India officials highlighted the growing importance of transaction, identity and behavioural data in enabling AI-driven decision-making. ASSOCHAM said the convergence of AI, DPI and progressive regulation could help deepen financial inclusion and strengthen India's position in global digital finance.

The report stressed that responsible governance alongside innovation will be crucial to building a resilient, AI-driven fintech ecosystem that delivers sustainable value.

This report is based on inputs from ANI, with additional reporting and background by the EdexLive Desk.