AI is a double-edged sword in financial sector, says RBI

Mumbai: Adoption of artificial intelligence (AI) without adequate safeguards can amplify existing weaknesses and create new risks in the financial sector, RBI Deputy Governor Swaminathan J has cautioned. Delivering the CUB Shri V Narayanan Memorial Lecture at SASTRA University in Thanjavur, he said AI is rapidly transforming how financial institutions serve customers, process documents, assess credit, monitor risks, and strengthen oversight.

“The real question is not whether finance will become more intelligent, but whether it will remain fair, accountable, inclusive, and humane,” he said.Swaminathan highlighted that AI can simplify customer interactions, improve responsiveness, and enhance credit delivery.