The Reserve Bank of India (RBI) governor, Sanjay Malhotra, recently made headlines by advocating for the use of artificial intelligence (AI) in the fight against money laundering and terror financing. He made these remarks during the Private Sector Collaborative Forum held by the Financial Action Task Force (FATF) in Mumbai.
Malhotra highlighted the pressing issues of money laundering and terror financing that threaten the stability of both national and global financial systems.
He stated, ‘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 applications of money laundering and terror financing but also support financial inclusion, encourage innovation, and facilitate economic growth.’
To effectively counter threats, Malhotra urged policymakers and regulators to utilize machine learning (ML) and AI for enhancing risk assessment models and system improvements. He emphasized the need for central banks to recognize emerging trends in the financial sector that criminals may exploit. He noted that proactive measures in the form of regulations should not inadvertently hinder financial inclusion.
Malhotra warned, ‘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.’
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- Financial Inclusion
- Money Laundering
- Sanjay Malhotra