Addressing the Global Conference on Financial Resilience here, the RBI Governor said, "Integrating advanced and emerging technologies such as AI, machine learning and big data analytics into organizational functioning can transform the way companies operate." financial institutions. AI and machine learning can improve predictive analytics and enable banks and NBFCs to identify potential risks and trends more accurately. These technologies can improve fraud detection by recognizing unusual patterns and transactions in real time, for example. which can protect institutions and their clients from fraud and financial crimes.
"As the financial sector becomes increasingly digitalised, the adoption of advanced technologies can significantly strengthen the ability of banks and NBFCs to resist and respond to various risks. However, it must be ensured that these technologies are secure, reliable and are aligned with the needs of the institution.
He noted that operational efficiency can be improved by automating routine tasks, reducing human error and freeing up resources for more strategic activities. Robotic process automation (RPA) can handle high-volume and repetitive tasks, such as data entry and transaction processing, faster and more accurately than humans, the RBI governor added.
Das also noted that as financial institutions increasingly rely on advanced technologies to improve their operations, dependence on third-party vendors and service providers may increase. A provider's inability to reliably provide services can directly impact the regulated entity's operations and customer service. Therefore, thorough due diligence is necessary before selecting third-party vendors, he added.
The RBI governor also observed that while the pursuit of business growth is important for banks and NBFCs, it should never come at the expense of taking unacceptable risks.
He added that having robust risk mitigants in place is essential to ensuring the long-term success and resilience of a regulated entity, as well as the broader financial system.
Das also highlighted the importance of ethics in the governance of financial institutions which entails compliance with laws and regulations, both in letter and spirit; pursuit of sustainable business practices; and avoid the thoughtless search for final results.
"As the financial sector becomes increasingly digitalised, the adoption of advanced technologies can significantly strengthen the ability of banks and NBFCs to resist and respond to various risks. However, it must be ensured that these technologies are secure, reliable and are aligned with the needs of the institution.
He noted that operational efficiency can be improved by automating routine tasks, reducing human error and freeing up resources for more strategic activities. Robotic process automation (RPA) can handle high-volume and repetitive tasks, such as data entry and transaction processing, faster and more accurately than humans, the RBI governor added.
Das also noted that as financial institutions increasingly rely on advanced technologies to improve their operations, dependence on third-party vendors and service providers may increase. A provider's inability to reliably provide services can directly impact the regulated entity's operations and customer service. Therefore, thorough due diligence is necessary before selecting third-party vendors, he added.
The RBI governor also observed that while the pursuit of business growth is important for banks and NBFCs, it should never come at the expense of taking unacceptable risks.
He added that having robust risk mitigants in place is essential to ensuring the long-term success and resilience of a regulated entity, as well as the broader financial system.
Das also highlighted the importance of ethics in the governance of financial institutions which entails compliance with laws and regulations, both in letter and spirit; pursuit of sustainable business practices; and avoid the thoughtless search for final results.
