October 15, 2024

Heavy reliance on AI could lead to concentration risks in the financial sector: RBI Governor

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The Reserve Bank of India (RBI) Governor Shaktikanta Das has cautioned that heavy reliance on artificial intelligence (AI) could lead to concentration risks in the financial sector.
He expressed concern that the growing use of AI could enable a few technology providers to dominate the market, creating systemic vulnerabilities.
Das also pointed out that AI introduces new vulnerabilities, including increased susceptibility to cyberattacks and data breaches.
The RBI Governor emphasized the importance of banks and financial institutions implementing strong risk mitigation strategies to address these risks and urged them to remain vigilant, highlighting the need for a balanced approach in leveraging AI’s potential while addressing its inherent risks.

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