Reserve Bank of India (RBI) Governor Shaktikanta Das has expressed concern over the increasing risks of Artificial Intelligence (AI). He has said that excessive dependence on AI can increase financial vulnerabilities.
Speaking at an event on the topic 'Central Banking at Crossroads' organized on the 90th anniversary of RBI in New Delhi on Monday, Das also expressed concern over the increasing debt across the world.
Das said that this is not good for monetary policy and financial stability. He also urged for international cooperation to deal with the challenges arising from geo-political tension and climate risk.
AI and machine learning increase business and profits
Das said, 'The development of modern technologies like Artificial Intelligence (AI) and Machine Learning (ML) has opened up new avenues for financial institutions to increase business and profits.
Besides, these technologies have also increased the risk to financial stability. This risk increases further at a time when this market is dominated by only a few companies.
Banks take advantage of AI, don't let them take advantage
The entire system of AI is not very clear yet. In such a situation, it becomes difficult to audit or decode the decision-making algorithms within it.
This could pose a greater threat to the financial market. Banks should definitely take advantage of AI and Big Tech but they should not be allowed to take advantage.
Graphics Source: NavJivanIndia | VaskarAssets
