Mumbai
The importance of adopting advanced technologies like artificial intelligence (AI) and machine learning (ML) to prevent financial fraud was emphasized by RBI Governor Shaktikanta Das during the Global Conference on Financial Resilience. In his address, it was highlighted that integrating these technologies into the functioning of banks and NBFCs can transform how they operate.
AI and ML can help in predictive analytics, identifying risks and trends more accurately, and improving fraud detection by recognizing unusual patterns in real-time transactions. This can protect institutions and customers from financial crimes.
As the financial sector becomes more digital, using advanced technologies can significantly strengthen banks and NBFCs’ ability to handle various risks. It’s important, however, to ensure that these technologies are secure, reliable, and aligned with the institution’s strategic goals. Operational efficiency can be enhanced through automation of routine tasks, reducing errors and freeing up resources for strategic activities. Robotic process automation (RPA) can quickly and accurately manage high-volume tasks like data entry and transaction processing.
Governor Das also noted that reliance on third-party vendors may increase with the use of advanced technologies. The failure of a vendor to deliver reliable services can directly impact the operations and customer service of the regulated entity. Therefore, thorough due diligence is essential when selecting third-party vendors. Finally, he stressed the importance of ethical governance in financial institutions, emphasizing compliance with laws and regulations, sustainable business practices, and avoiding undue risks in pursuit of business growth.
