RBI’s Embrace of AI for Enhanced Regulatory Oversight: McKinsey and Company, Accenture Solutions Chosen
The Reserve Bank of India has set its sights on collaborating with renowned international consultancy firms, aiming to fortify its regulatory vigilance over banks and NBFCs. The central bank, it is reported, has meticulously handpicked McKinsey and Company India LLP along with Accenture Solutions Pvt Ltd India to spearhead the development of innovative systems integrating the prowess of artificial intelligence and machine learning into their supervisory framework.
In the not too distant past, precisely in September of the previous year, RBI beckoned forth solicitations of interest, inviting the participation of expert consultants proficient in wielding cutting-edge analytics, artificial intelligence, and machine learning, all directed at generating incisive supervisory insights. Following the initial clarion call, the RBI discerningly singled out seven applicants, inviting them to partake in the forthcoming request for proposal phase.
Unveiled through a Reserve Bank document, the contract, amounting to a substantial ₹91 crore, has now been formally awarded to none other than McKinsey and Company India LLP, in tandem with Accenture Solutions Private Limited India.
While the RBI has already made strides in the integration of AI and ML within its supervisory mechanisms, it now harbors ambitions to elevate its operations to a grander scale, ensuring that the spoils of sophisticated analytics are harnessed to their fullest extent. The expression of interest, publicly revealed in the month of September, articulated the ongoing endeavors of the Department of Supervision, which has been diligently crafting and deploying not only linear but also a selection of machine-imbued models for the purpose of conducting supervisory examinations. Moving forward, this department is poised to excavate the labyrinthine datasets, discerning the latent attributes that can be adroitly harnessed to birth novel and refined supervisory inputs.
As the sweeping wave of artificial intelligence garners momentum, a multitude of regulatory and oversight entities have initiated the incorporation of machine learning methodologies into their modus operandi, thereby imbuing their undertakings with an unprecedented dynamism. The suite of AI and ML technologies beckons promising prospects for real-time data dissemination, imbued with effectiveness in both management and distribution.
Incidentally, the sphere of regulatory purview overseen by the RBI extends its dominion to encompass not only conventional banks, but also urban cooperative banks, NBFCs, payment banks, small finance banks, local area banks, credit information enterprises, and a selective ensemble of Indian financial institutions.