AI Tip Toes Into BFSI, Cautiously

AI is steadily moving into India’s BFSI sector, improving fraud checks and efficiency, but humans still remain the task masters

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After disrupting the consumer app landscape, artificial intelligence is now seeking to penetrate India’s banking and financial services industry (BFSI). However, the progress is measured. Here, AI assists, and humans run the show. It is the same script across India’s BFSI ecosystem — AI is being layered onto existing systems rather than embedded at the core.  

From fraud prevention and risk scoring to document verification and customer servicing, the technology is enhancing efficiency without replacing human judgement. Of course, in an industry built on trust, capital protection and regulatory oversight, no algorithm should be allowed to move past human intellect. 

While fraud detection models run quietly in the background, document processing is automated, and customer queries are resolved faster than ever, humans are still the anchors of every decision when it comes to moving money or approving credit.

However, this does not mean innovation is being discouraged in core finance operations. Well, the industry simply expects explainable, auditable and accountable stacks.

Founders, bankers and infrastructure providers also agree on one principle, which is to ensure that data foundations, governance frameworks and oversight mechanisms mature before AI is allowed deeper into decision-grade roles. Now, before explaining why such caution is being exercised, it is important to understand the current state of AI in core financial systems.

AI Guides, But Humans Govern With An Iron Fist 

In the payments and fintech segments, AI is widely used in fraud detection, anomaly tracking and risk scoring. But autonomy remains limited.

Siddharth Mehta, cofounder of Kiwi, said, “We see AI as an enabler, not an autopilot.” Kiwi relies on layered checks, multiple data signals and escalation mechanisms beyond automated systems. 

Siddharth Mehta, cofounder of Kiwi, said, “We see AI as an enabler, not an autopilot.” Kiwi relies on layered checks, multiple data signals and escalation mechanisms beyond automated systems. 

Model accuracy, false positives and behavioural drift are continuously monitored. “AI should quietly improve safety in the background, not create anxiety for users,” Mehta said.

He also indicated that the reluctance to give AI full control stems from the asymmetric risk in payments. A wrongly blocked transaction can immediately damage customer trust,........

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