RBI Deputy Governor Rohit Jain emphasized that policy should provide room for innovation to grow while ensuring accountability and resilience evolve simultaneously. Speaking at the Global Fintech Fest 2026 on Wednesday, Jain outlined that policy should create conditions where useful innovation can develop responsibly, requiring clear guardrails where risks are understood, room for experimentation where they are still emerging, and the ability to adapt as technology evolves. As reported by Business Standard, he stressed that policy must remain informed by what is happening on the ground, noting that regulators cannot understand emerging technologies through returns and supervisory observations alone. Jain highlighted that regular engagement with financial institutions, fintechs and technology providers helps identify new use cases and emerging concerns early, while giving industry greater clarity about regulatory expectations. He also emphasized that emerging technologies are often understood better through carefully controlled use than through speculation alone, with regulatory sandboxes playing an important role by allowing genuinely new applications to be tested within defined boundaries before deployment.
Reserve Bank of India deputy governor Rohit Jain warned that technology's speed can amplify familiar financial risks and make disruptions spread faster through the financial system. Speaking at the Global Fintech Fest on Wednesday, Jain emphasized that while none of these risks are entirely new, technology can allow their effects to travel through the financial system faster, more widely and sometimes in ways that are harder to detect. According to reports from The Times of India, The Hindu BusinessLine and Business Standard, Jain highlighted that emerging technologies such as artificial intelligence, tokenisation, distributed technologies and quantum computing could make finance cheaper, more accessible and responsive, but could also amplify risks by increasing the speed, scale and interconnectedness of financial systems. He identified speed, concentration and opacity as the three key risks emerging as technology becomes more deeply embedded in finance. As per The Hindu BusinessLine, Jain noted that amid rapid advances in algorithms, tokens, platforms, cloud infrastructure and quantum computing, policymakers should not lose sight of the people at the other end of technology. An institution may outsource the computation, but it cannot outsource the consequence, he cautioned, adding that technology also does not eliminate traditional risks. At machine speed, resilience cannot depend only on preventing every error, with institutions must also be able to detect problems early, contain their effects and intervene before a small mistake becomes a much larger one.
On concentration risks, Jain noted that financial institutions may increasingly depend on a relatively small number of cloud providers, technology vendors and AI model providers, often using overlapping datasets and similar technological infrastructure. As reported by The Times of India, the concern extends beyond the failure of individual institutions to the possibility that common dependencies could transmit disruption or error across many institutions simultaneously. The failure of a common provider could become a financial-system problem rather than an isolated institutional failure, Jain explained. This interconnected nature of technological infrastructure creates systemic vulnerabilities that traditional risk management approaches may not adequately address. The concern, therefore, is not simply the failure of one institution, but the possibility that a common dependency could transmit disruption or error across many institutions at the same time. Jain emphasized that the growing dependence of financial institutions on a small number of cloud providers, technology vendors and AI model providers could create a new source of systemic risk, with disruptions at a common provider potentially spreading across institutions.
Jain stressed that financial institutions and fintech companies must not forget that there is always someone at the other end of technology - savers, borrowers, merchants or families depending on its outcomes. As reported by The Economic Times, he emphasized that most customers will never know which model made a recommendation, which cloud hosted it or which technology enabled a transaction. They will, however, experience the outcome. Their confidence in technology will ultimately depend not on how sophisticated it is, but on whether it works for them fairly, reliably and safely. The deputy governor noted that the objective should not merely be to make finance faster or smarter, but to ensure that technological progress makes finance more useful, resilient and responsive to those it serves. He explained that every technological wave expanded the range of what human beings could do, and the opportunity before us is to ensure that this wave expands not only what finance can do, but also what finance can do better for those it serves. According to The Hindu BusinessLine, Jain added that if we can achieve that, emerging technology will have served not merely innovation, but the larger purpose of finance itself.
Regarding opacity concerns, Jain highlighted that advanced models can identify relationships and arrive at decisions in ways that may be difficult to explain, emphasizing that greater sophistication cannot mean weaker accountability. According to The Hindu BusinessLine and Business Standard reports, Jain stated that an institution may outsource computation but cannot outsource consequences, noting that customers affected by important financial decisions deserve something more meaningful than being told that a model made the recommendation. An institution may outsource the computation, but it cannot outsource the consequence, he said. He stressed that technology should not replace human judgment and accountability in financial decision-making. Jain also called for a proportional approach, saying regulatory expectations should rise with the consequences of a particular technology use, noting that a tool used to summarise an internal document cannot be treated in the same way as a system that autonomously approves credit or executes financial transactions. He emphasized that purpose, prudence and policy need to move together, cautioning that purpose without prudence could lead to recklessness, while prudence without purpose could result in stagnation. As per The Hindu BusinessLine, Jain noted that policy is what binds the two together at scale.
According to The Hindu BusinessLine and Business Standard reports, Jain emphasized that creating a balance between technological progress and regulatory oversight presents significant challenges. He noted that regulate too early, and we risk writing detailed rules for a technology we do not yet fully understand, or for an architecture that may change before the rules take effect. Regulate too late, and the technology may already be deeply embedded before its risks are fully understood and addressed. The deputy governor stressed that policy should focus on outcomes and accountability rather than prescribing every technological choice. The obligation to treat customers fairly does not change because an algorithm influences the decision. Similarly, responsibility for managing risk does not disappear because a model or technology is supplied by a third party, he said. Jain called for good policy that gives innovation room to grow, while ensuring that accountability and resilience grow with it, with the objective not merely to make finance faster or smarter, but to ensure technological progress makes finance more useful, resilient and responsive to those it serves. He concluded that customers' confidence in technology will ultimately depend not on its sophistication but on whether it works fairly, reliably and safely for them.
