Highlighting the importance of advanced technologies such as artificial intelligence, machine learning, RBI Governor Shaktikanta Das urges banks and NBFCs to incorporate latest technologies to avoid the risk of financial fraud.
“Integrating advanced and emerging technologies such as AI, ML and big data analytics in organisational functioning can transform the way financial institutions operate. AI and ML can enhance predictive analytics and enable banks and NBFCs to identify potential risks and trends more accurately. These technologies can improve fraud detection by recognising unusual patterns and transactions in real time. Thus, they can protect the institutions and their customers from financial crimes and frauds,” Shaktikanta Das said on Thursday while addressing the Global Conference on Financial Resilience.
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“As the financial sector gets increasingly digitised, adoption of advanced technologies can significantly strengthen the ability of banks and NBFCs to withstand and respond to various risks. It has to be, however, ensured that these technologies are secure, reliable and aligned with the institution’s overall strategic goals,” Das Added.
The governor of the RBI added that although banks and NBFCs should always strive for commercial expansion, this should never come at the price of accepting unacceptably high risks.
He continued, “strong risk mitigants are critical to guaranteeing the long-term viability and robustness of a regulated entity as well as the overall financial system.”
Das also emphasised the need of ethics in the management of financial institutions, emphasising the need to follow rules and laws in letter and spirit, pursue sustainable business methods, and refrain from the heedless chase of profit margins.
