New Delhi [India], June 8 : Echoing the sentiment expressed by Reserve Bank of India (RBI) Governor Shaktikanta Das, Kristalina Georgieva, Managing Director, International Monetary Fund (IMF), underscored the need to discuss the financial stability challenges in a separate discussion in Washington D.C.
Georgieva, while welcoming the participants of the 23rd annual conference, invoked the need to supervise the dynamic financial sector. "Changes are being driven by many factorsfrom economic developments to geopolitics to climateand by the force of ever-accelerating technological advancement. These forces demand our attention," she said.
She underscored the challenges posed to the financial sector due to the introduction of new technologies such as blockchain, crypto, tokenization, and central bank digital currencies and AI.
"Blockchain, crypto, tokenization, and central bank digital currencies are healthy challengers to traditional demand-deposit banking. And, of course, changes are driven by artificial intelligence: "generative AI"not totally new, yet something that is now poised for a breakthrough," she added.
The RBI governor expressed the same insights on June 7 in the MPC press conference, stressing the need to invest in the IT systems in the banks for the smooth functioning of banking transactions.
"Banks should invest adequately in IT systems." The RBI has also proposed to set up a digital payments intelligence platform to mitigate payment-related fraud.
Addressing the 23rd annual conference on policy challenges for the financial sector, the IMF MD underscored issues of data loss, system breakdown, and threats of cyber attacks as significant risks to the financial sector.
The IMF's Global Financial Stability Report observed that almost one-fifth of the reported cyber incidents in the past two decades have affected the financial sector.
"The pattern of the world crisis continues, but India is seeing positive growth. But we need to stay vigilant against new challenges," Das had said.
Earlier in May, the RBI governor, speaking at the Global Conference on Financial Resilience, emphasized the need to strengthen the operational resilience of the financial sector. "Cyber risks and possible cyber-attacks are on top of the list so far as such disruptions are concerned. The banks and other financial institutions are to be organizationally resilient so that they anticipate risks early and absorb them efficiently," he had added.
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