Speaking at the 106th annual conference of the Indian Economic Association in Delhi last week, Rao said that despite the transformative potential of GenAI, there could be potential impacts on productivity, jobs and income distribution. While supporters expect broad economic and social benefits, skeptics point to concerns such as increased unemployment and challenges in redistributing resources during the transition.
Rao outlined specific concerns and expectations for financial institutions deploying AI in their processes and decision making. These include bias, robustness issues, data privacy, cyber security, consumer protection and maintaining financial stability. He said AI inherits biases and errors from its training data, making regular fairness audits necessary. He highlighted the challenge of AI models being black boxes, making them difficult to decode for audit and supervisory reviews.
“AI may also pose some new challenges to governance, particularly where the technology is used to facilitate autonomous decision making and may limit or potentially eliminate human judgment and oversight,” Rao said. ” They outlined ten aspects for financial institutions deploying AI models, aiming to balance innovation and responsible technology use. These include fairness, transparency, accuracy, consistency, data privacy, explainability, accountability, robustness, monitoring, updating, and human oversight.
He stressed that incorporating these aspects would promote public trust and ensure responsible AI deployment, calling for a supportive regulatory framework to guide AI applications and global cooperation in such a framework.
(TagstoTranslate)Business News(T)Transparency(T)RBI Deputy Governor(T)Governance(T)Fairness(T)AI technology in banking