RBI flags tech concentration risks, warns of disruptions
RBI Deputy Governor Rohit Jain has warned that the financial sector's increasing reliance on a small number of cloud and technology providers creates systemic concentration risks. He cautioned that a failure at a single provider could trigger widespread disruptions across multiple financial institutions.
Why it matters
This highlights the growing vulnerability of global financial stability to the digital infrastructure and third-party vendors that underpin modern banking systems.
MUMBAI: RBI deputy governor Rohit Jain flagged concentration risk among banks as most of them become dependent on a few cloud, technology and model providers, warning that a common technology dependency could allow a disruption at one provider to spread across multiple financial institutions.Speaking at the Global Fintech Fest in Mumbai on Wednesday, Jain said 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."I see three key concerns as emerging technologies become more deeply embedded in finance: speed, concentration and opacity," Jain said.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in