Regulation should not inhibit innovation in financial sector: Niti senior adviser Anna Roy

With increasing use of artificial intelligence (AI) in the financial sector, policymakers need to take extra care that the regulatory framework should not inhibit innovation, NITI Aayog Senior Adviser Anna Roy said on Monday.

Addressing a virtual conference on 'AI in Indian Financial Services - Uncovering Ground Truth' organised by industry body FICCI, Roy said the government is also working to expand the use of AI in the pension and insurance sector to benefit the customers and extend the coverage of social security schemes.

''As policymakers and as regulators, we need to take that extra care that regulation or regulatory framework should not inhibit innovation.

''And there, I think one important thing which needs to be done is for everybody to work together and not in silos,'' she said.

Roy further highlighted that with digital divide, digital literacy along with cyber security related issues, the use of AI in financial services has a lot of avenues.

''In sectors represented by public goods, the approach of the government has been to take a lead and be the key driver, whereas in sectors like financial sector, the government's role is more of an enabler and a catalyst,'' she noted.

Stressing on transparency in policy and regulations, Roy said the government adopts a consultative approach while drafting any policy.

''I think that kind of transparency in policymaking is extremely important, and all stakeholders need to work together towards a common goal,'' she said.

During the event, a FICCI-PwC report 'Uncovering the Ground Truth: AI in Indian Financial Services' was also released.

The report pointed out that 83 per cent of the banking, financial services, and insurance (BFSI) sector believes that enhancing customer experience is the top driver for implementing AI.

Besides, 65 per cent of BFSI respondents believe they are ahead of their peers in AI implementation, despite the dynamically changing AI landscape.

While 82 per cent of the survey respondents said they have deployed chatbots to make customer servicing easy, 65 per of them have deployed fraud detection AI engines.

As per the report, 34 per cent of survey respondents said they had independent centres of excellence for AI-led innovation, followed by 21 per cent who listed business units as the drivers of AI implementation in their organisations.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)