Union Finance and Corporate Affairs Minister Nirmala Sitharaman on Friday warned that regulators and companies must make sure that rapid innovation does not result in the creation of new types of systemic risks and urged for greater accountability and protections around artificial intelligence as the technology expands into finance and other crucial areas.
Speaking at the Global Fintech Fest, Sitharaman stated that while AI might speed up financial transactions and decisions, it could also enable fraud, hacks, and other irregularities to spread at a never-before-seen rate.
“AI may aid judgment, but responsibility must remain human and institutional,” she stated, adding that the need for review, explanation, and appeal increases with the severity of an AI-driven decision ramifications.
She stated that “higher-risk uses must receive higher levels of scrutiny before deployment and throughout their life cycle.”
Sitharaman asked if there was a case to further explore the warning, citing the resignation of an Anthropic researcher due to concerns that unchecked growth of self-improving AI models could ultimately result in human death. “I bring this up to highlight institutional accountability to the greater humanity, not to alarm anyone.
“The question of AI becoming rogue is left for society at large to answer unless those safeguards arrive soon and are revised consistently. That distribution of risk is unsustainable,” she stated.
Additionally, the minister cautioned against viewing the decision as one between embracing AI and staying away from it, stating that the important distinction was between responsible and well-managed deployment.
“Good institutional design must make efficiency and safety mutually reinforcing; they shouldn’t be competing objectives,” she stated.
Sitharaman suggested taking into account a federated industry platform that may provide the nation’s larger technology sector with a collective voice in international regulatory debates, given the growing international expansion of Indian technology companies.
