During the RBI@90 High-Level Conference in New Delhi, the RBI Chief highlighted several concerns. He conveyed that "Heavy reliance on Al" could lead to concentration risks, especially if a small number of technology providers dominate the market.
Failures or disruptions in Al systems could cascade across the financial sector, amplifying systemic risks. Increased use of Al could make financial systems more susceptible to cyberattacks and data breaches, Shaktikanta Das said in the RBI@90 High-Level Conference in New Delhi.
The "opacity" of Al makes it difficult to audit and explain the algorithms driving financial decisions, potentially leading to unpredictable market consequences, warned Das.
Das urged banks to enhance their liquidity buffers and remain vigilant in the social media space to deal with any unforeseen situations. He also emphasized the need for adequate risk mitigation practices to address these emerging vulnerabilities.
It's a timely reminder of the importance of balancing innovation with risk management.
The RBI@90 High-Level Conference was held in New Delhi to mark the 90th anniversary of the Reserve Bank of India (RBI). The event featured a keynote address by RBI Governor Shaktikanta Das titled "Central Banking at Crossroads". During his speech, Governor Das discussed the evolving role of central banks amid global uncertainties and emphasized the importance of financial stability and economic growth.
The conference also included panel debates and discussions on various topics related to central banking, including the impact of emerging technologies like AI on financial systems.
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