The Reserve Bank of India (RBI) governor, Sanjay Malhotra, recently claimed that emerging technologies like artificial intelligence (AI) can help combat threats from money laundering and terror financing to national and global financial systems.
Speaking at the Private Sector Collaborative Forum of the Financial Action Task Force (FATF), Malhotra raised the issues of money laundering and terror financing troubling the South Asian giant. The event was hosted in Mumbai by the Reserve Bank of India and the Ministry of Finance and brought together a broad range of stakeholders from the public and private sectors and civil society.
“Together, let us continue to collaborate and innovate in building a financial ecosystem that is not only safe and secure but also fast, convenient, accessible and affordable. Let us build financial systems that not only thwart the attempts of money laundering, terror financing and proliferation financing, but also support financial inclusion, encourage innovation, and facilitate economic growth,” said Malhotra.
He said to counter these threats, policymakers and regulators must augment machine learning (ML) and artificial intelligence (AI) to make appropriate systems enhancements and improve risk assessment models.
He urged central banks to understand the latest trends and developments in the financial sector that are vulnerable to exploitation by criminals and develop rules and frameworks that detect suspicious transactions and take preemptive actions.
But he also said that regulations must not unintentionally impede financial inclusion. “It must be ensured that regulations do not create unintended barriers to financial inclusion. We need to be mindful of customer rights and convenience while fulfilling the due diligence requirements.” He said.
