AI must be used responsibly, or it can create biases: Banking heads at BFSI

Speaking at Business Standard's BFSI Summit, Virat Diwanji, National Head-Consumer Banking, Federal Bank, spoke with Nivedita Mookerji in a panel discussion on Impact of tech, AI on retail banking

The role of artificial intelligence (AI) is expanding in retail banking, however, speaking at the Business Standard's BFSI Summit 2025 on Wednesday, banking heads urged to exercise caution. "Artificial Intelligence (AI) is helping bankers to identify the patterns. But it should be used responsibly; otherwise, it can create bias", said Virat Diwanji, National Head - Consumer Banking, Federal Bank.

 

Speaking on the 'Impact of tech, AI on retail banking', in a chat with Business Standard's Executive Editor, Nivedita Mookerji, Diwanji said, "Customer service is the first place where a bank builds its trust. And the use of technology alone cannot win a bank its trust. It will depend on how responsibly banks use AI is going to be the decisive factor as we move forward."

 

The discussion centred on the transformative impact of AI on banking, emphasising its role in customer service, fraud detection, and lending. 

 

World of tomorrow to be different: Ambuj Chandna, DBS Bank

 

Speaking on how banking is being affected by AI today, Ambuj Chandna, MD & Head - Consumer Banking Group, DBS Bank India, said, "A lot of banking that we do today is getting touched by AI quite extensively. So, I think the world of Tomorrow is very different from the world of the past."

 

Building confidence and trust with the customers

 

Diwanji further stated that AI will be used for speed and humans for trust, and these two would be the fulcrum of customer experience.

 

Elaborating further on the customer trust aspect, Sanjay Mudaliar, Executive Director, Bank of Baroda, said, "Customer trust is built over time through the way banks use technology to serve their clients, how efficiently they address grievances, manage interactions, and ensure a positive experience. With the vast amount of data available to banks, technologies like AI will play a key role in managing and enhancing that trust."

 

Use of AI by lending institutions has evolved: Sachin Seth, CRIF

 

Commenting on the use of AI by lending institutions, Sachin Seth, Regional Managing Director, India and South Asia, CRIF, said, "There has been significant evolution in the use of AI by lending institutions. In the context of credit lending, AI enhances data quality and accuracy, among other benefits. The RBI has provided clear guidance on its use, and we believe it’s important to exercise caution and apply AI in areas where we have an adequate understanding. It will still take a few years for the technology to reach its full potential in this space." 

 

AI deeply embedded in our lives: Arvind Vohra, HDFC Bank

 

Expressing his views on how deeply AI is now embedded in our lives, Arvind Vohra, Group Head, Retail Assets, HDFC Bank, said, "As bankers and global citizens, we must recognise how deeply AI is embedded in our daily lives, from the invisible infrastructure of machine learning that shapes the content we consume to the way it influences our thoughts. The key question for banks is where to draw the line. AI must be deployed ethically and responsibly."

 

Must focus on the right investments: Ambuj Chandna, DBS Bank

 

"All of us who are working in this space also need to focus on the right investments. Investing in the tech to make sure the governance is right is equally important, and I think it does need sizable Investments in building the right data culture", Chandna noted.

 

Elaborating further, Virat Diwanji said that investment behind the tech will take a while to play out...as a prudent investor, we need to keep questioning where we are investing.

 

AI creating job opportunities: Sachin Seth, CRIF

 

Sachin Seth argued that AI is also creating new job opportunities, even as organisations focus on upskilling their workforce. People are not resistant to AI; they simply want clarity on which direction to take and how to align with the change.  Catch all coverage of the Business Standard BFSI Summit 2025 Day 1 here