The rapid technological advances in IndiaEspecially in areas such as Artificial Intelligence (AI), blockchain and data analysis, have opened new opportunities to change traditional financial services and processes, India Economic survey 2024-2025 pointed out.
AI and large language models (LLMS) has improved customer service with interactive chatbots and customized experiences, while blockchain provides safe, transparent and effective transactions. In addition, it is to change consumer behavior and expectations – the fuel of digital native and growing demand for personal, seamless and practical financial solutions – to run established companies and newcomers to renew themselves to remain competitive.
India’s economic survey, which investigates national trends and AIDS to determine resource allocation, was presented by India’s Finance Minister Nirmala Sitharaman in Parliament on January 31. It was published one day before Announcement of India’s union budgetAn annual financial report describing the government’s planned expenses, expected revenue and expenses for the coming financial year.
“Now the world is in the artificial intelligence (AI) -driven digital age, driven by decreasing data storage and processing costs, greater accessibility and connection. These innovations can lead to higher automation and often improve human decision -making speed and accuracy when they correctly manage to mitigate risks, ” Investigation said.
“The use cases for AI and Machine Learning (ML) Applications Of banks in India varies across areas such as credit insurance, regulation of capital planning, liquidity management, fraud discovery and prevention, risk assessment and handling, portfolio optimization, pricing models and chatbots, “the survey.
In November last year, India’s reserve bank (RBI) acknowledged one Increased mention of artificial intelligence (AI) -related technicians in the annual reports from the public banks, a space that is once again actively explored by private sector banks. In its October Bulletin, the Central Bank’s report pointed out This “enthusiasm” for AI technologies among public banks in India is now largely on par with private banks, especially in recent years.
For example, Bank of Baroda has one of India’s prominent banks introduced a generative artificial intelligence (AI) -Powered Virtual Relationship Manager (VRM) to improve the digital customer service experience. VR serves as a relationship manager and gives customers advice on investments and available financial services.
This innovative VR is a first in the local banking sector and aims to help customers by providing real -time information about the bank’s products and services. It also helps to identify customer needs for specific banking services and can help with basic information such as receiving bank statements, requesting checkbooks, applying for debit cards and issuing interest certificates.
‘Any risks’
The economic survey stated that together with the benefits, Using AI in the banking system involves any risks.
The black box AI system nature can make it challenging to evaluate one’s reliability or challenge their decisions. This lack of openness raises concerns about confidence and complicates the validation of justice and accuracy in AI decisions, which makes it difficult to review or understand the algorithms that form the basis for these decisions.
Responsibility issues arise when it is difficult to track decisions to their origin or assign liability. Other risks include problems with human resources, such as insufficient human surveillance, overcome AI and erosion of human expertise.
Cyber security threatHarmful activities such as synthetic identity fraud, villain trade and market manipulation are also major problems. System risks are significant issues, such as the inability to intervene or manage market correlations.
“Establishing robust AI control is the first and decisive step in dealing with the challenges that come with the implementation of AI systems. Without a suitable framework for control, AI systems can function without clear guidelines or monitoring, leading to potential abuse or abuse of technology, ”” pointed out the financial survey.
“Since vulnerabilities can be developed with the rate of innovation and the degree of AI integration in financial services, regulatory and supervisory efficiency can take a rear seat of the AI-related skills and knowledge of financial supervisory authorities do not keep up with the development in this space,” the survey added.
So far, the RBI has created a regulating sandbox focusing on innovative technology products and services.
RBI recently announced The establishment of a committee to create a framework for responsible and ethical enabling artificial intelligence (free-Ai) in the financial sector.
RBI’s initiative comes as Generative AI (Genai) is projected to add $ 359-438 billion to India’s gross domestic product (GDP) in 2029-2030 and highlights the need for ethical and responsible use of the technology to support the country’s financial sector and economic growth.
RBI has done that too introduced an artificial intelligence/machine learning (AI/ML) -based model, mulehunter.ai, developed by Reserve Bank Innovation HUB (RBIH), to handle digital fraud. The AI model is also expected to help the banks deal with the issue of Mule Bank accounts, a typical tactics owner uses to fune the revenue from their fraudulent operations.
In order for artificial intelligence (AI) to function directly within the law and thrives on growing challenges, it must integrate a corporate blockchain system that ensures data input quality and ownership – which means that it must keep data secure and at the same time guarantee the immutability of data. Check out COINGEEK’s coverage on this new technology to learn more Why Enterprise Blockchain will be the spine in AI.
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