RBI Guv Shaktikanta Das Calls For 'Trustworthy AI', Says It Will Play Growing Role In Regulatory Compliance
The RBI governor stressed that the integration of these technologies into India's financial system will necessitate strategic investment in research.
Reserve Bank of India (RBI) Governor Shaktikanta Das urged central banks, governments, and financial sector stakeholders to promote the development of "trustworthy AI," emphasising the need to address data privacy and other critical issues. Speaking at the Global Fintech Fest, Das highlighted the transformative impact of advanced technologies on the financial sector.
Das noted that artificial intelligence and machine learning (ML) are set to revolutionise financial services, with applications already underway in areas like fraud detection and credit scoring. "AI algorithms are already being deployed for fraud detection. Machine learning models are increasingly being employed in credit scoring, leveraging predictive analytics to assess creditworthiness, and expand access to credit," he said.
Role Of AI In Fintech
Looking ahead, Das predicted that AI and ML will play a growing role in regulatory compliance, investment advisory services, and algorithmic trading, reshaping the financial landscape. However, he emphasised the need for a cautious approach to adoption, urging stakeholders to fully understand and manage the risks associated with these technologies. "Developing trustworthy AI requires attention to data privacy, accountability, and transparency," he added.
Das also spoke about the potential of quantum computing, which could revolutionise real-time decision-making and risk management through advanced optimisation techniques. He highlighted the Internet of Things (IoT) as another emerging technology with significant opportunities for the financial sector.
Strategic Investment In Research
The RBI governor stressed that the integration of these technologies into India's financial system will necessitate strategic investment in research, cross-sector collaboration, and proactive regulatory frameworks to ensure ethical deployment and mitigate risks. He assured that the RBI is closely monitoring these developments and addressing associated challenges.
Addressing the green finance sector, Das pointed out that while green bonds and green deposits offer significant benefits, they face scalability issues. He noted the need for robust monitoring and reporting mechanisms to ensure the authenticity and impact of green projects. Das suggested that technologies like blockchain could enhance transparency and traceability in green bond issuances, providing immutable records of project outcomes.
Das's remarks underscore the importance of fostering innovation in the financial sector while maintaining a focus on ethical considerations and risk management as technologies continue to evolve.
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