Sitharaman's AI Warning: Double-Edged Sword for India's Financial Sector
India's financial sector is increasingly adopting artificial intelligence (AI) to enhance operations and manage risks, but Finance Minister Nirmala Sitharaman has warned that AI can be a 'double-edged sword.' While AI helps detect fraud and improve customer service, it also poses new risks, including the potential for AI-driven scams.
The Reserve Bank of India recognized the Unified Fintech Forum as another self-regulatory organization for the fintech sector under the SRO-FT framework, a move that Sitharaman welcomed. She cautioned that AI can influence people without them realizing it and expressed concern about the growing use of AI by illegal players.
Investors are now taking into account how financial companies use AI when evaluating their competitiveness. Companies that effectively utilize AI may stay ahead in the industry, while those relying on outdated systems risk becoming less attractive to investors.