Careful adoption of AI in critical segments is need of hour: RBI Guv Das

Das on AI: There should be careful adoption of AI in critical decision-making in segments, RBI Governor, Shaktikanta Das said. Das was speaking at the Global Conference on Digital Public Infrastructure in Bangalore on Monday.

“AI promises to make processes simpler and more efficient. It can also emulate decision-making king to a great extent. However, when it comes to regulated financial institutions, there should be careful adoption of AI in critical decision-making segments. For example, in loan sanctioning, while AI can definitely assist the process, the institutions using them should have a proper understanding of the models and ensure accountability of the outcomes,” Das opined.

He went on to add that going beyond the understanding of risks posed by AI, financial institutions should clearly outline the liabilities and ensure a calibrated and responsible adoption. “Central banks and governments on their part should focus on fostering the development of trustworthy AI keeping data privacy, explainability, accountability and transparency in its code,” Das said.   He also added that Artificial Intelligence is making forays in the financial sector in the form of services like chatbots, internal data processing for intelligent alerts, fraud, risk management, credit monitor modeling, and other processes. Integrating this cutting-edge technology into a robust and responsible DPI presents an opportunity to amplify the capabilities and.

Talking about two major initiatives of the Reserve Bank in the digital public infrastructure space, Das said, “ UI which was launched last year is in pilot mode. The other one is the CBD which was launched towards the end of 2022 and it's in the pilot mode we are eventually making CBD and UPI interoperable so that the reach and access the reach and our objective of spreading financial inclusion through these payment systems can become more broad bases and go to every nook and corner of a large country like India.”

Das highlighted that India is the lead Chair of the Global Partnership on AI for 2024. “This multi-stakeholder initiative with 29 countries aims to bridge the gap between AI theory and practice by supporting cutting-edge research and advancing applied activities,” the RBI chief mentioned.

According to Das, it is important to be proactive to leverage the capabilities of new technologies, but at the same time, it is essential to be abundantly mindful of the associated risks and challenges. “I feel it would be prudent to keep in mind the following three aspects, first. AI is data driven science, the authenticity of data being used in training the models, possibility of biases, concerns of data privacy, need to be carefully examined.”