Banglore (Karnataka) [India], August 26 : Integration of artificial intelligence (AI) into financial services brings significant opportunities for all stakeholders, the Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday.
Speaking in Bengaluru at the event of the Global Conference on Digital Public Infrastructure and Emerging Technologies, the RBI Governor noted the significant role of AI in the financial sector.
"Today, as Artificial Intelligence (AI) is making forays in the financial sector in the form of services like chatbots, internal data processing for intelligent alerts, fraud risk management, credit modelling and other processes," Das said.
"Integrating this cutting-edge technology into a robust and responsible DPI presents an opportunity to amplify the capabilities and efficiency of DPI even further," he added.
He further stated that the fusion of DPI with AI would propel us into a new world of "Digital Public Intelligence".
"Integration of AI into financial services brings significant opportunities for all stakeholders. For customers, AI enables hyper-personalised products and faster, more relevant services. Financial institutions like lenders benefit from advanced tools for risk and fraud management, streamlined operations, and reduced compliance costs. Regulators gain enhanced oversight and real-time monitoring capabilities, which would improve regulatory enforcement and market stability," the RBI governor said.
However, he also pointed out the challenges posed by the integration of AI into this sector.
"Data privacy concerns arise from handling vast volumes of personal information. Ethical AI governance is essential to ensure fairness and prevention of bias. Financial institutions must ensure that AI models are explainable, i.e., ability to explain why certain results are produced," the governor remarked.
The RBI Governor further stated that "AI technology can also be misused to spread misinformation, potentially causing severe damage and disruption to DPIs as well as other digital systems."
"They can also damage the reputation and operations of financial institutions," he said.
Das said that the government's efforts underscore its commitment to capitalise on the potentialities of AI technology while ensuring robust governance.
India is the lead chair of GPAI in 2024. As GPAI's Lead Chair, India is convening global AI experts to discuss key issues and promote trustworthy AI.
In March this year, the Union Cabinet approved the comprehensive national-level India Artificial Intelligence mission with a budget outlay of Rs 10,371.92 crore.
Compute Capacity, Foundational Models, Datasets, Application Development, Future Skills, Startup Financing, and Safe AI are the seven key pillars of India's AI Mission.
In addition, Das said that the Ministry of Electronics and Information Technology (MeitY) of the Government of India is taking important initiatives to ensure safety in the sector.
India is in the process of setting up an AI Research Analytics and Knowledge Dissemination Platform which will focus on developing indigenous AI-enabled products and solutions to tackle India-specific challenges and complex real-life problems.
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