AI exuberance in finance has real costs |
India’s digital story is, by any measure, a remarkable achievement. In little over a decade, India has built public digital infrastructure that many larger economies still debate in theory. The architecture created around identity, payments, and data has demonstrated that scale and inclusion need not be mutually exclusive. It reflects deliberate public policy, regulatory imagination, and institutional courage.
Yet the very success of India’s digital transformation creates a more demanding responsibility. When technology becomes ubiquitous, it stops being innovation and starts becoming power. And power, left insufficiently governed, carries consequences that surface not in balance sheets, but in the lived experience of citizens.
Much of the recent discourse on the financial sector and artificial intelligence (AI) has understandably focused on capability and near-term outcomes. Faster processing, sharper fraud detection, improved underwriting, better customer interfaces, and operational efficiency dominate presentations and board discussions. Indian banks and financial institutions are investing deeply in modernising systems, partnering with technology firms and scaling platforms that serve hundreds of millions of users. Yet it would be premature to call them digital-first or digital-best. Many institutions continue to rely on technology to mask process weaknesses and customer pain points that remain stubbornly unresolved.
But finance has never been remembered for its breakthroughs alone. Each decade in global finance is recalled as much for failures of governance as for advances in technology. Innovation has a recurring habit of creating the illusion that old risks have been conquered. They never are. Technology changes the form of risk, not its nature. In many cases, it introduces new ones.
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