Artificial Intelligence (AI) is transforming the banking sector by enabling faster decision-making, improved customer experiences, and operational efficiency. However, it also introduces risks such as bias, model errors, data privacy issues, and regulatory challenges. AI auditing ensures these systems are ethical, transparent, and accountable throughout their lifecycle. Frameworks like RBI’s FREE-AI, along with global standards such as NIST AI RMF and CSA AICM, guide banks in implementing responsible AI. The way forward involves pragmatic guardrails, continuous monitoring, human oversight, and multi-stakeholder collaboration to balance innovation with risk, ensuring trustworthy and inclusive AI-driven banking.
Click to View MoreThe Reserve Bank of India has published the Financial Inclusion Index (FII) 2025, measuring progress in integrating everyone into the formal financial system. The index measures inclusion based on three pillars: Access (35%), Usage (45%), and Quality (20%). The index shows improvement in financial inclusion, largely due to increased usage and quality of financial services.
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