Unlocking Financial Potential With AI And Digital Infrastructure

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Praveena Rai, Chief Operating Officer of the National Payments Corporation of India (NPCI), spoke on the transformative impact of digital public infrastructure on the financial sector at BW Businessworld’s Festival of Fintech event on Friday.  

Rai discussed the symbiotic relationship between data and AI, noting, "Simply put, AI is taking data and analytics then using that advanced data to create models, which will do the work for you." She emphasised this relationship as both data and AI are enablers that unlock predictive possibilities and enhance personalisation in financial services.

She drew attention to the significant strides made in digital public infrastructure in India, citing the success of platforms like UPI, Aadhaar and DigiLocker. Rai highlighted DigiLocker's role in simplifying access to important documents like mark sheets and driving licenses.

Financial Inclusion In India

Rai talked about the broader implications of these digital advancements for financial inclusion. She elaborated on the multifaceted role of the banking system, which extended beyond payments to include savings and credit access. She observed a positive trend where more users are retaining money in their bank accounts instead of cashing out immediately, indicating growing trust in the banking system.

Rai underscored the necessity of a comprehensive approach to financial inclusion, stating, "Financial inclusion means that I should have the full power of what that bank account can give me." She highlighted the importance of providing returns on savings, access to credit and insurance to ensure financial security. This, she argues, would empower individuals to use their money productively.

AI As Solution

Delving into the challenges and opportunities in the credit sector, Rai pointed out the high percentage of unserved and underserved populations in India. She proposed leveraging technology and AI to offer contextual credit solutions and enhance the creditworthiness of individuals.

Rai also discussed the potential of digital platforms to revolutionise the insurance sector by making it more accessible and user-friendly. She cited examples of point-of-purchase insurance offerings, such as adding insurance while booking travel tickets, as early signs of this transformation. "Being able to target, being able to create that kind of awareness, being able to communicate to people that insurance premiums don't have to be large amounts that happen once a year but can actually be paid up in a frequency more in tune with somebody’s earning cycle," she explained.

Rai also emphasised the ongoing evolution of digital public infrastructure and its capacity to reshape the financial landscape. She pointed to the emergence of new-age organisations in the securities sector as evidence of this change and expressed optimism about the future.