The latest news from India says that Indian banks are working to embrace the AI and blockchain revolution after Deputy Governor of the Reserve Bank of India (RBI), Mahesh Kumar Jain, made the suggestion. While speaking at the Bengal Chamber of Commerce and Industry, Jain listed some of the problems facing the country’s banking industry and advised banks to use these technologies to solve these problems.
In his words: “use these technologies to deal with the new problems facing the banking industry, such as technological disruptions, changing client needs, and cybersecurity risks.” The suggestion comes as India is investigating digital currency operations. It was also reported that a central bank digital money was introduced for testing sometime in November last year.
With a regulatory sandbox for blockchain technology created in 2019, the RBI has also been investigating the potential of blockchain technology for many years now. Jain highlighted the potential of AI and blockchain to improve efficiency and reduce costs in the banking sector.
He noted that AI could be used to automate manual processes, such as underwriting and credit scoring. In contrast, blockchain could streamline cross-border payments and reduce the need for intermediaries.
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The RBI boss went ahead to remind key players in the Indian banking industry that the use of AI in the banking sector is not new, and reminded them that many banks worldwide are already adopting the technology which they now use for various applications. In India, several banks have also started experimenting with AI, including HDFC Bank, ICICI Bank, and Kotak Mahindra Bank.
Jain Lists Reasons Indian Banks Must Adopt Blockchains And AIs
Jain emphasized on the potential of blockchain and AI to boost productivity and save costs in the banking industry. He pointed out that although blockchain may be used to speed cross-border payments and eliminate the need for intermediaries, AI could be used to automate laborious processes like credit rating and its likes.
Jain hinted on the COVID-19 epidemic lockdown, claiming that many customers have turned to online banking and electronic payment methods, which has underlined the significance of digital technology in the banking industry. He said that by utilizing AI and blockchain, banks might be able to serve their customers better and keep up with their evolving expectations.
While referring to how the blockchain and AIs can help stiffen security in the banking industry, it says that these technologies play a major role in the cybersecurity sector of the banking industry, particularly in terms of data privacy and cybersecurity. He made it clear that large volumes of data are needed for using blockchain and AI, making them susceptible to cyberattacks. He then went ahead to suggest that to protect both their own data and the data of their customers, banks must make sure they have strong cybersecurity procedures in place.
Indian Government Admits Cryptocurrency Potential, Goes Slow on The Integration
In a different development, cryptocurrency analysts have accused India’s government of being cautious regarding the technology, which raises questions about the legal position of cryptocurrencies in the country. The Indian Finance Minister recommended a tax on digital assets to address some of these problems, which sparked discussions over the legitimacy of cryptocurrencies in the country.
The Union Budget 2022 announced a subsequent 30% tax on bitcoin gains. Indian cryptocurrency experts, on their own part, have reacted to the recent development, validating Jain’s claim, suggesting that the adoption of AI and blockchain in the banking sector may have significant effects on the sector in India.
Meanwhile, different key players in India’s cryptocurrency industry have joined Jain in calling on all major Indian banks to channel their efforts into investing in blockchain and AI technologies, insisting that it has the potential to bring an innovative future to the country’s banking industry as a whole and address most of the new issues that the industry is facing.