Emerging technologies such as artificial intelligence (AI), quantum computing, robotics and synthetic biology have the potential to not just revolutionise human and social lives, but to also alter the global order, said Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar on Wednesday night.
“We do not know the outcome of these technologies, (whether) good or bad. But there clearly are risks. And those risks are being highlighted openly and forcefully,” said Sankar at the grand finale of RBI global hackathon ‘Harbinger 2023’, which witnessed participation from many techies and startups to build innovative products and solutions for the banking and financial ecosystem. “As creators of such technological products and innovations, you entrepreneurs need to think about these issues. As regulators, our job is to provide some guidance on the direction in which the innovation should take place,” said Sankar.
He said the objective of the RBI is to guide innovation to maximise the financial well-being of people and the efficiency of the financial systems. Also, the aim is to anticipate and proactively try to contain and channel any undesirable effects of technologies.
Quoting AI company DeepMind Co-founder Mustafa Suleyman’s book ‘The Coming Wave’, Sankar said that ‘technology is an orchestra with no conductor’. Sankar said that what governments, regulators, and authorities all over the world are trying to do is act as some sort of conductor. “That is not going to be an easy job. But it needs to be done,” said Sankar.
Sankar said that RBI basically works on monetary policies, currency issues, banking regulation, and supervision. In the last couple of decades, it set up a number of important institutions, such as the National Payments Corporation of India (NCPI) and the Institute for Development & Research in Banking Technology (IDBRT).
Until recently technology issues were never on the radar for the RBI, apart from the fact that it also has an IT department, said Sankar. He said in the recent past RBI, central banks, governments, and other authorities have shown a lot of interest and involvement in technology.
“Why is the RBI involved in a hackathon? This is not something that we could have imagined five years ago,” said Sankar. “Why this interest in technology? Two years back we set up a full-fledged department looking at addressing the issue of fintech. The reason lies in the nature or impact of technology.”
He said technology is not only facilitating human activities but also helping build orders in the world — economic order, social order, and political order. “All of us are familiar with fintech, which is transforming the financial system not just in India but across the world,” Sankar said.
Conducting a global hackathon like ‘Harbinger 2023’ is an initiative by RBI to create incentives for innovators. Sankar said the aim is to channel their energy to innovate to help support financial inclusions and other such objectives. This includes building financial products for the differently abled, enabling a wider reach of central bank digital currency (CBDC) through offline capabilities, scale-up technologies such as blockchain and facilitating regulatory compliances.
“All of them are issues that need immediate addressing and which have a very clear positive impact on the way the financial system operates,” said Sankar.
He said RBI will continue making efforts like the hackathon initiative to not only encourage targeted and responsible innovation but also to imbue a sense of social objectives.
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