Session Title: Keynote: AI in Fintech

Speaker:
G Padmanaban, EX-ED, Reserve Bank of India

Key Takeaways:

The use of AI in fintech has great implications for the banks, customers, and regulators provided
key questions about AI are answered, felt G Padmanabhan, Ex-Executive Director, RBI, while
delivering his ‘AI in Fintech’ keynote at Razorpay's annual fintech event, FTX.

Three Big Questions

The RBI has three major issues as far as the use of AI and Gen AI are concerned: data bias,
transparency and governance.
As far as data bias goes – because AI is as good as the data on which it has been trained and
because it inherits issues and biases, how are we going to solve for it? And what is the industry
feedback on this aspect?
As regards transparency now, transparency also has an in-built consistency. Now, two customers
of similar standing and similar credit scoring coming out with different numbers as far as the
credit is concerned – is a question.
So when we talk about transparency, we are talking about consistency as well as transparency,
and this is very important when we move further into the use of AI and Gen AI.
On governance, there are many novel challenges, especially where technology is used to
facilitate autonomous decision-making, and this autonomous decision-making is on the iterative
use of data and its outcomes.

Human intervention a solution?

The question is whether the solution to all these is putting a human being in the whole loop.
Because putting a man in the loop to make sure that there is more consistency may actually
derail the process and make the process less efficient.

The Benefits of AI in the Financial Sector

GenAI can be used in the banking industry or the financial sector in many ways to create value
for both customers and banks. However, GenAI also faces certain challenges, and it is essential
to deal with them in such a way that it results in responsible and ethical use.
Here is a vision of the future of the financial sector or the banking sector powered by Gen AI, if
used the right way.
Employees will find their time being spent on higher-quality tasks that are beyond the capability
of the frontier of GenAI.
Regulators will be able to supervise the banks with sophisticated tools and be clued into the
happenings on an ongoing basis. Everything would be tailored to the maturity of the business
model and the circumstances of each entity that is regulated.
Customers will find dealing with banks or entities delightful, hassle-free, and the products will be
tailored to their individual needs.

AI is advancing. And we need to stay aware and guide people on the use of technology in the
right places in the right way.

The only question that remains is: are we ready?