Risk management to be revolutionised by AI with Custom-Fit Regulation: Chairman of SEBI

Artificial intelligence will enable us to advance regulation to the point where risk management is practically tailored to an entity. If the entity has effectively managed its risk, the level of regulation would naturally be low.

“Artificial intelligence will enable us to advance regulation to the point where risk management is practically tailored to an entity. If the entity has effectively managed its risk, the level of regulation would naturally be low.”, Smt. Madhabi Puri Buch, Chairperson of Securities and Exchange Board of India (SEBI), gave the keynote address at the Global Fintech Fest 2023 (GFF 2023) held in there today.

“AI will give us the ability to move from risk-based supervision to risk-based regulation to segmented regulation to a granular-level regulation, which will make life a lot easier for all regulated entities,” she said.

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Smt. Buch emphasised on the value of creating resilient financial systems and utilising the potential of fintech to promote economic growth throughout her speech.

Smt. Buch elaborated on discussing the function of established entities in the fintech industry, saying, “Established entities are undergoing a huge metamorphosis and are increasingly evolving into fintech companies in the way they appear, feel, and speak. Even our stock exchanges are fintech businesses today. Some mutual fund systems are, at their core, nothing more than FinTech’s. Due to their substantial advantages in terms of people, stability, and cash flows from their conventional industries, the incumbents have transformed into rocket ships when they apply the concepts of contemporary technology and design thinking.”

Smt. Buch stated that India was the first country in the world to switch to the T+1 settlement. We are discussing one-hour settlements, which is a first step towards immediate settlement. All of this will be visible to you rather quickly. Currently, something traditional will change into something really trendy and current. Things will soon be completed in a couple of minutes. Both the market and the regulator agree that this is the case.