In a recent conference organized by the Reserve Bank of India (RBI), deputy governor Mahesh Kumar Jain urged Indian banks to be prepared for the future by adopting innovative technologies like artificial intelligence (AI) and blockchain. He emphasized the significance of effective corporate governance and governance structure in managing potential risks and being ready for future challenges.
Technological disruptions, changing customer expectations, and cybersecurity threats present new risks for banks. To address these challenges, Jain advised focusing on technology adoption, digital transformation, enhancing customer experience, and investing in cybersecurity measures. This way, Indian banks can ensure sustainable growth and stability while staying ahead of the curve.
India’s central bank digital currency (CBDC), launched on November 1, 2022, began offline functionality testing in March. At that time, RBI executive director Ajay Kumar Choudhary expressed India’s intention to materialize its CBDC as a medium of exchange. This move shows the country’s commitment to embracing the future of digital payments and financial infrastructure.
On the other hand, India’s neighbor Pakistan announced plans to train 1 million IT graduates on AI by 2027. Their intended use cases for AI include weather prediction, agriculture supply chain optimization, and health services transformation.
However, the adoption of these technologies also exposes banks to potential risks. Inappropriate tech adoption and usage can lead to system vulnerabilities and data breaches. Also, rapid tech advancements can cause job displacement for bank employees who have outdated skills.
This calls for a balanced and strategic approach to technology adoption in the banking sector. Banks should effectively assess their current capabilities and outline a clear road map for implementing AI, blockchain, and other innovative technologies. Furthermore, they must invest in employee skill development and training programs to keep their workforce relevant in today’s rapidly evolving financial landscape.
Despite the challenges and potential risks, the adoption of AI and blockchain in the banking sector is a step towards making India’s financial system more efficient, secure, and customer-centric. As these technologies continue to evolve, they will undoubtedly play a more significant role in shaping the future of banking and financial services worldwide.
Source: Cointelegraph
