RBI selects Accenture, Mckinsey to use AI for regulatory supervision

Reserve Bank of India (RBI) has selected information technology (IT) service provider Accenture and consultancy firm McKinsey and Company India to use artificial intelligence for its project. The two firms have been selected to offer machine learning and advanced analytics for generating supervisory inputs for the apex bank. The tender for the project was first floated in September last year. 

The total value of the contract is about ₹91 crore, (₹56 crore for McKinsey, and ₹35 crore for Accenture), as per an RBI document. The date of completion is slated to be three years from the time of project commencement. The two organisations were selected from seven competing entities, including Boston Consulting Group, Deloitte, Ernst and Young, KPMG, and PwC. 

The supervisory jurisdiction of RBI extends over supervised entities which include banks, urban cooperative banks (UCB), nonbanking financial companies, payment banks, and credit information companies, among others. RBI assesses the financial soundness, asset quality, operational viability, and governance framework of these supervised entities through on-site inspections and off-site monitoring.

Globally, banking and financial institutions, including RBI, have been using AI and machine learning in supervisory processes. For instance, RBI collects data from regulated entities for predictive analysis. The department has also been developing and using machine learning models for supervisory examinations. RBI now aims at using such data to generate new and improved supervisory inputs.

To this end, the two selected firms will perform data profiling with a supervisory focus, develop and deploy models on specific use cases, create and maintain a cloud-based digital analytical zone, and transfer knowledge and skills for further capabilities building. Overall, it is aimed at enhancing RBI’s data-driven surveillance capabilities.

RBI has shown intent to leverage AI for other operations as well. Last week, while announcing the central bank’s monetary policy, Governor Shaktikanta Das said that RBI would be using AI-based conversational payments on unified payments interface (UPI). This will ‘converse’ with users to make safe transactions.