Earlier this month, the Reserve Bank of India (RBI) published its "Framework for Responsible and Ethical Enablement of Artificial Intelligence" (FREE-AI), which sets forth principles by which firms in the financial sector can pursue AI innovation while mitigating the attendant risks.
Developed by an RBI-appointed committee of experts, the report explains that AI has the potential to be transformative, offering new approaches for customer engagement, credit assessment, risk monitoring, fraud detection, and supervision. However, AI also has the potential to amplify existing challenges and create new ones. "The challenge with regulating AI is in striking the right balance, making sure that society stands to gain from what this technology has to offer, while mitigating its risks," the report reads.
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