In the last couple of years, the finance and banking sectors in India have increasingly deployed and implemented AI technologies. Such technologies are being implemented for front-end and back end processes – offering solutions for both financial and business management operations. At the moment, the AI landscape appears to be overwhelmingly populated by natural language processing and natural language generation technologies culminating in numerous chatbot initiatives by various banking and financial actors. Arguably more significant – but less documented – is the usage of said technologies for financial decision making on a variety of issues including, credit-scoring, transactions, wealth and risk management, and fraud detection. These trends are largely facilitated by technology service companies – both large-scale firms and startups – that either work with established banking and financial institutions to deploy AI technologies or develop and offer their own financial services directly to consumers.
This report seeks to map the present state of use of AI in the banking and financial sector in India. In doing so, it explores:
• Uses: What is the present use of AI in banking and finance? What is the narrative and discourse around AI and banking/finance in India?
• Actors: Who are the key stakeholders involved in the development, implementation and regulation of AI in the banking/finance sector?
• Impact: What is the potential and existing impact of AI in the banking and finance sectors?
• Regulation: What are the challenges faced in policy making around AI in the banking and finance sectors?
The report first offers an overview of the ways in which AI is being used in the sector. This is followed by an examination of existing challenges to the adoption of AI and the significant legal and ethical concerns that need to be considered in light of these trends. Lastly, the report draws attention to a number of key government actions and initiatives surrounding AI related to the banking and finance industry, discusses challenges to the adoption and implementation of AI and articulates recommendations towards addressing the same.
This report was authored by Saman Goudarzi, Elonnai Hickok and me, and can accessed here.