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RBI to Develop AI SupTech Capabilities

RBI to Develop AI SupTech Capabilities

by Starling Insights

Starling Insights Editorial Board

Sep 15, 2023


ICYMI: Last month, the Reserve Bank of India (RBI) awarded McKinsey and Accenture a nearly $11 million contract to develop supervisory technology (suptech) capabilities utilizing artificial intelligence and machine learning (AI/ML).

The consultants will be responsible for analyzing the data the RBI already collects, as well as any supplementary data sources that may be available, to generate improved supervisory inputs.

The RBI has made clear that it sees bank governance and culture as serious supervisory concerns. In a June speech, Governor Shaktikanta Das argued that governance is the most important contributor to a bank's long-term stability and financial performance.

"The focus areas for any Board should be that of approving and overseeing implementation of the Bank's corporate values, policies and strategic objectives," Das said. "Setting the correct tone at the top is a primary step in building a conducive corporate and risk culture as well as ethical behaviour among the rank and file... These are not abstract concepts. These are necessities which would help in building public trust and confidence on Banks."

Given this emphasis, it is perhaps reasonable to assume that some of these RBI's new suptech capabilities will focus on assessing the non-financial risks associated with governance and culture.

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