India's Central Bank Governor Urges AI Adoption for Improved Banking Customer Service
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India's central bank governor calls on banks to adopt AI to address consumer complaints
March 17 (Reuters) - India's central bank-regulated entities can leverage artificial intelligence internal controls to address consumer complaints on mis-selling and aggressive practices, central bank governor Sanjay Malhotra said on Monday. Ninety-five commercial banks in India received over 10 million customer complaints in the 2023-2024 financial year, Malhotra said. "With the rapidly growing customer base and expanding suite of products, this may grow if we do not get our act together," he added. Financial institutions can use AI to analyse large volumes of data to detect spikes in issues such as ATM failures or erroneous charges, and receive pre-emptive alerts, Malhotra said in a speech. AI-driven chatbots and voice recognition tools can also be used to eliminate language barriers in a linguistically diverse country like India, Malhotra added. He also called for financial institutions to invest in human capital to improve customer service and grievance redressal processes. Reporting by Ananta Agarwal in Bengaluru; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence
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India's Central Bank Governor Calls on Banks to Adopt AI to Address Consumer Complaints
(Reuters) - India's central bank-regulated entities can leverage artificial intelligence internal controls to address consumer complaints on mis-selling and aggressive practices, central bank governor Sanjay Malhotra said on Monday. Ninety-five commercial banks in India received over 10 million customer complaints in the 2023-2024 financial year, Malhotra said. "With the rapidly growing customer base and expanding suite of products, this may grow if we do not get our act together," he added. Financial institutions can use AI to analyse large volumes of data to detect spikes in issues such as ATM failures or erroneous charges, and receive pre-emptive alerts, Malhotra said in a speech. AI-driven chatbots and voice recognition tools can also be used to eliminate language barriers in a linguistically diverse country like India, Malhotra added. He also called for financial institutions to invest in human capital to improve customer service and grievance redressal processes. (Reporting by Ananta Agarwal in Bengaluru; Editing by Vijay Kishore)
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AI in Banking: RBI Calls for Smarter Grievance Redressal Systems
Disclaimer: This content generated by AI & may have errors or hallucinations. Edit before use. Read our Terms of use In an inaugural address at the Annual Conference of the RBI Ombudsmen, RBI Governor Sanjay Malhotra urged financial institutions to adopt AI for grievance redressal. The conference, organized around World Consumer Rights Day (March 15), focused on achieving consumer satisfaction through various measures. The governor's speech adds to RBI's increasing interaction with AI. In December 2024, the central bank constituted an eight-member panel to develop a framework for ethical AI in the financial sector, and its subsidiary unit, Reserve Bank Innovation Hub (RBIH), unveiled MuleHunterAI -- a tool designed to detect and flag mule bank accounts involved in financial fraud. Previously, in October 2024, former RBI Governor Shaktikanta Das warned that increased reliance on AI and ML technologies posed financial stability and concentration risks. This added to the concerns of AI use in the financial space like bias and transparency outlined and challenges like data privacy concerns and "lack of explainability" outlined by RBI's Deputy Governor Rajeshwar Rao in previous addresses. Moving forward, while RBI's push for AI-driven grievance redressal is significant, the concept itself is not new. E-commerce platforms like Meesho, Dukaan, and Booking.com, alongside government initiatives such as the National Consumer Helpline (NCH) 2.0 and the Kumbh Sah'AI'yak, have already incorporated AI chatbot capabilities to facilitate customer service. Also Read:
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India's central bank governor calls on banks to adopt AI to address consumer complaints
March 17 (Reuters) - India's central bank-regulated entities can leverage artificial intelligence internal controls to address consumer complaints on mis-selling and aggressive practices, central bank governor Sanjay Malhotra said on Monday. Ninety-five commercial banks in India received over 10 million customer complaints in the 2023-2024 financial year, Malhotra said. "With the rapidly growing customer base and expanding suite of products, this may grow if we do not get our act together," he added. Financial institutions can use AI to analyse large volumes of data to detect spikes in issues such as ATM failures or erroneous charges, and receive pre-emptive alerts, Malhotra said in a speech. AI-driven chatbots and voice recognition tools can also be used to eliminate language barriers in a linguistically diverse country like India, Malhotra added. He also called for financial institutions to invest in human capital to improve customer service and grievance redressal processes. (Reporting by Ananta Agarwal in Bengaluru; Editing by Vijay Kishore)
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India's central bank governor Sanjay Malhotra calls for the adoption of AI in banking to address rising consumer complaints, highlighting the potential of AI in improving customer service and grievance redressal in the financial sector.
RBI Governor Advocates AI Adoption in Banking
In a significant move towards modernizing India's banking sector, Reserve Bank of India (RBI) Governor Sanjay Malhotra has called on financial institutions to leverage artificial intelligence (AI) to address the growing number of consumer complaints. This announcement came during Malhotra's speech at the Annual Conference of the RBI Ombudsmen, coinciding with World Consumer Rights Day
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.Rising Consumer Complaints in Indian Banking
The urgency of this initiative is underscored by alarming statistics: ninety-five commercial banks in India received over 10 million customer complaints in the 2023-2024 financial year
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. Governor Malhotra expressed concern over this trend, stating, "With the rapidly growing customer base and expanding suite of products, this may grow if we do not get our act together"2
.AI Applications in Banking Customer Service
Governor Malhotra outlined several potential applications of AI in improving banking services:
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Data Analysis: AI can be used to analyze large volumes of data to detect spikes in issues such as ATM failures or erroneous charges, enabling banks to receive pre-emptive alerts
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Chatbots and Voice Recognition: AI-driven chatbots and voice recognition tools can help eliminate language barriers in linguistically diverse India
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Internal Controls: Banks can leverage AI for internal controls to address consumer complaints on mis-selling and aggressive practices
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RBI's Evolving Stance on AI
This push for AI adoption is part of a broader engagement with AI technologies by the RBI:
- In December 2024, the RBI constituted an eight-member panel to develop a framework for ethical AI in the financial sector
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. - The Reserve Bank Innovation Hub (RBIH) unveiled MuleHunterAI, a tool designed to detect and flag mule bank accounts involved in financial fraud
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However, the RBI has also expressed caution. Former Governor Shaktikanta Das warned in October 2024 about potential financial stability and concentration risks associated with increased reliance on AI and ML technologies
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Balancing AI and Human Capital
While advocating for AI adoption, Governor Malhotra also emphasized the importance of human capital. He called for financial institutions to invest in improving customer service and grievance redressal processes through human resources as well
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.Wider Context of AI in Customer Service
The RBI's push for AI-driven grievance redressal aligns with broader trends in customer service. E-commerce platforms like Meesho, Dukaan, and Booking.com, as well as government initiatives such as the National Consumer Helpline (NCH) 2.0, have already incorporated AI chatbot capabilities to enhance customer service
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.As India's banking sector grapples with the dual challenges of a growing customer base and increasing complaints, the integration of AI technologies presents a promising solution. However, it will be crucial to address concerns such as data privacy, bias, and transparency as these AI systems are developed and implemented.
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