Prioritise use of Web3, AI in fraud detection and to generate early warning signals

Prioritise use of Web3, AI in fraud detection and to generate early warning signals

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman on Friday asked banks to be more digital savvy and give immediate priority to use Web3 and Artificial Intelligence (AI) technology in fraud detection and to generate early warning signs in an unforeseen event.

She was addressing the 75th Annual General Meeting of Indian Banks’ Association in Mumbai.

“Use of Web3, data analysis, Artificial Intelligence, deep dive into data – all of these should have some coordination by the IBA. Leveraging Web3 and AI should be an immediate priority for the banks, especially in fraud detection and generating early warning signs about something going wrong,” she said.

The Minister said that such technologies also bring in benefits such as detecting fraud, tracking of money, detecting unusual transactions and alerting financial institutions and the government in case of suspicious changes.

Highlighting the importance of cyber-protection, she asked banks whether they were geared to have adequate firewalls. “Are you protected against hacking and Black Swan events which bring down your systems?”

Nudging banks to appoint staff who must speak the local language, she said, “Show inclusivity in your staff, in the way you speak to your customers. When you have staff who do not talk the regional language and who demand citizens to speak in a particular language, you have a problem.”

“Please review the people getting posted at branches, people who cannot speak the local language should not be assigned to roles dealing with customers. You must have a lot more sensible ways of recruiting people,” she added.

She pointed out to an incident when a bank official told a customer that he did not understand Hindi.

Stressing the need for professionalism, the Finance Minister said, “As we move towards greater professionalism of banks, we should realise the need for banks to stand up on their own and raise their own capital.

“No fraudulent account will be left without being taken to the court, fraudsters have no place in their country, banks will not suffer for money taken away by fraudsters,” she said.

She also pointed out the importance of technology upgradation of Regional Rural Banks. “RRBs need a lot more assistance in digitalisation, sponsoring banks need to give more attention to RRBs, including in bringing them to Account Aggregator Framework and in disbursal of agricultural credit.”

The Finance Minister told the banks that they should facilitate the customers in meeting their finance needs, with an energy of positivity.

“You are in a better position now, you are not afraid of taking decisions now. I want you to now say that you are ready for good business, that we are ready to serve you, be proactive and convey to the customers that you will meet them wherever they want and do business with them, keeping your norms intact.”

The Finance Minister expressed satisfaction that banks had come out of their troubles in earlier times and were able to stand up on their strengths.

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By Dipak

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