Artificial intelligence could reshape India’s banking ecosystem faster than quantum computing or distributed ledger technology, but financial institutions must strengthen governance, reskill employees and prepare for new operational risks, says Dr. Deepak Kumar, director of the Institute for Development and Research in Banking Technology (IDRBT).
Kumar describes AI and machine learning as the most significant near-term structural disruptors for banking, with their effects likely to become visible over the next one to three years. While AI offers opportunities to improve operational efficiency and decision-making, he cautions that institutions must establish effective guardrails before deploying the technology at scale.
“Before Mythos, ‘Go, go, go’ was the driving energy. Now today, in a more civilized manner, people are saying, ‘Wait a sec,’” Kumar says, describing the shift in industry attitudes toward AI adoption.
The conversation also explores how generative AI could consolidate financial and non-financial services, the monetary and systemic risks associated with central bank digital currencies (CBDCs), and the role of programmable money in tokenized corporate bond transactions. Kumar explains how AI could help automate documentation and compliance checks in cross-border digital payments while accounting for country-specific anti-money laundering requirements and capital controls.
For banking security leaders, Kumar identifies change management and workforce readiness as critical challenges. He argues that technology executives must move beyond their individual functions and take a broader view of business processes, technology integration, supply chains and customer outcomes.
“The single most important challenge is change management, scaling, and reskilling of the people who can take judgment,” he says.
In this video interview with CISONow, Kumar also discussed:
- Why AI and machine learning could disrupt banking sooner than quantum computing or distributed ledgers.
- How generative AI could bring banking, insurance, investments and other services closer together.
- The differences between UPI-based deposit payments and CBDC-based central bank currency, including implications for liquidity and systemic risk.
- How programmable CBDCs and distributed ledger technology could support tokenized corporate bonds and automated payments.
- How frontier AI could streamline cross-border transactions while supporting compliance requirements.
- Why CIOs, CISOs and CTOs need integrated, business-focused perspectives alongside technology expertise.
Dr. Deepak Kumar is the Director of the Institute for Development and Research in Banking Technology (IDRBT). His experience includes leading key Reserve Bank of India (RBI) portfolios, including the Foreign Exchange Department, and contributing to the evolution of India’s banking technology infrastructure. His work spans banking computerization, digital payments, central bank digital currencies, distributed ledger technology and emerging technologies.
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