Technology-backed entities such as startups should do more to develop a robust governance system, which is important for sustainability, Ajay Kumar Choudhary, executive director of the Reserve Bank of India (RBI) said. The use of technological innovations must be done in a sensible way and risks should be properly managed.
A blind adoption without understanding the biases and the models based on artificial intelligence, machine learning and internet-of-things built with advanced technology will only prove counterproductive, Choudhury said, adding that scalability and interoperable are must for technology-backed innovations.
“RBI’s focus area is innovation, while innovations are desirable they also need to be responsible,” he said.
Citing several initiatives by the central bank to bolster digital banking such as peer-to-peer lending and the NBFC account aggregator framework, Choudhary said that the Reserve Bank of India had also started a regulatory sandbox, through which innovative solutions are launched on a test basis.
The central bank has announced on-tap applications for the second cohort on ‘cross border payments’ and also launched a theme-agnostic fifth cohort under the regulatory sandbox initiative.
Source: financialexpress.com
