Heavy reliance on AI can lead to concentration risks, says RBI governor

Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday cautioned banks on increasing penetration of artificial intelligence (AI) in the financial services globally, saying that it also poses financial stability risks and warrants adequate risk mitigation practices.

“The heavy reliance on AI can lead to concentration risks, especially when a small number of tech providers dominate the market. This could amplify systemic risks, as failures or disruptions in these systems may cascade across the entire financial sector,” Das cautioned.