New Delhi: State Bank of India (SBI) chairman CS Setty on Monday flagged opportunities as well as vulnerabilities being created by rapid growth in digital finance, platform lending and data-driven underwriting, underscoring the significance of trust-based innovation.
Cyber risks, operational vulnerabilities, algorithmic biases and rising systemic interconnectedness will compound challenges for banks and financial institutions if their internal governance and risk management frameworks don't evolve alongside innovation, Setty said at the CII annual business summit in the national capital.
"As India's financial system expands in scale and complexity, trust must remain its foundational principle. Innovation without trust cannot sustain itself," he said.
"The rapid growth of digital finance, platform lending and AI-driven underwriting creates new opportunities but also new vulnerabilities."
Speed, he said, must never come at the cost of safety, and innovation must never undermine inclusion.
"Ultimately, the Indian customer must continue to feel secure and confident in the integrity of our financial system. That confidence is our greatest institutional asset," Setty said.
He highlighted the massive fund requirement for India to realise the goal of emerging as a developed country by 2047. Some estimates suggest investment requirements of ₹600-650 lakh crore by 2035 alone, he said.
This requirement cannot be fulfilled by banks alone, he said, pitching for further deepening of the bond market and encouraging greater inflows from mutual funds, pensions funds and insurance firms.
"About 90% of bank balance sheets today are built through deposits. But the nature of savings flows is changing," he said.
Cyber risks, operational vulnerabilities, algorithmic biases and rising systemic interconnectedness will compound challenges for banks and financial institutions if their internal governance and risk management frameworks don't evolve alongside innovation, Setty said at the CII annual business summit in the national capital.
"As India's financial system expands in scale and complexity, trust must remain its foundational principle. Innovation without trust cannot sustain itself," he said.
"The rapid growth of digital finance, platform lending and AI-driven underwriting creates new opportunities but also new vulnerabilities."
Speed, he said, must never come at the cost of safety, and innovation must never undermine inclusion.
"Ultimately, the Indian customer must continue to feel secure and confident in the integrity of our financial system. That confidence is our greatest institutional asset," Setty said.
He highlighted the massive fund requirement for India to realise the goal of emerging as a developed country by 2047. Some estimates suggest investment requirements of ₹600-650 lakh crore by 2035 alone, he said.
This requirement cannot be fulfilled by banks alone, he said, pitching for further deepening of the bond market and encouraging greater inflows from mutual funds, pensions funds and insurance firms.
"About 90% of bank balance sheets today are built through deposits. But the nature of savings flows is changing," he said.
