"I would urge all of you to treat data as a fiduciary responsibility, not as a business asset," he said. Malhotra also cautioned fintechs against taking advantage of regulatory gaps or chasing rapid expansion before checking in with regulators.
Banks are leaning on AI agents to automate back-office work and customer support, and they are using algorithms to track risk, flag fraud and evaluate borrowers. Those tools can lower costs, but the pace of rollout is also stirring regulatory concerns about data protection, cyber readiness and depending on a small circle of technology vendors.
Malhotra warned that AI can fuel bias and exclusion, create data privacy and cybersecurity problems, and chip away at human judgment. Addressing those issues is "extremely important for maintaining consumer trust." The central bank is also looking at wider technology exposures. On Wednesday, Deputy Governor Rohit Jain pointed to banks' dependence on a limited number of shared tech providers as a potential risk to financial stability. Malhotra added that large firms should aim to be "not just too big to fail, but too significant to be careless," and he underscored that "Regulation and innovation are not opposing forces, but they are mutually reinforcing pillars of a resilient financial ecosystem."
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Malhotra's through-line was simple: AI can boost efficiency, but trust is the asset that keeps finance running. The RBI is scrutinizing broader technology risks, and leaders are signaling caution on data use, cybersecurity and concentrated tech dependencies.
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