look news india
Mumbai: Reserve Bank of India (RBI) Governor Shaktikanta Das has warned against the increased use of artificial intelligence (AI) across the world in the financial services sector and the threat posed by AI to financial stability, calling for substantial risk appetite by banks. Management measures are needed. But he insisted. He suggested the banks of the country to be conscious about social media.
There are big risks in excessive reliance on AI by banks, which could lead to huge losses. The increasing use of AI may also create new vulnerabilities such as cyber attacks and data theft.
Addressing a conference organized by the RBI in Delhi, he said the ambiguity of AI makes it difficult to identify decision-making algorithms, leading to the risk of unpredictable outcomes in the market.
He also suggested that banks and other financial institutions should take all possible measures to stay safe from all these risks. In today's era where social media and online banking are widely used, banks need to be vigilant and strengthen their liquidity buffers in the context of social media as rumors and misinformation can lead to liquidity stress.
Technologies pose threats to financial stability. Banks should take advantage of AI and not let AI dominate them.
Private credit markets are expanding rapidly around the world with limited restrictions. He further said that such private markets pose risks to financial stability.