Five effective ways financial cos can tackle GenAI risks

Every organisation is a tech company today. Leveraging the latest innovations, Indian organisations are exploring potential and adopting new technologies such as generative artificial intelligence (GenAI) rapidly. There is no doubt that GenAI shows great promise and blends seamlessly into business operations. Organisations are utilising AI to predict market trends, detect fraud, personalise customer services, and automate decision-making processes. The benefits are substantial; however, the integration of AI also introduces new risks, particularly related to data security, privacy, and governance. 

With AI systems becoming integral to financial operations, the volume of sensitive data processed and stored has skyrocketed. This surge makes financial institutions prime targets for cyberattacks. A robust data security framework is essential to mitigate these risks. Moreover, in compliance with the recent data protection regulations such as the Personal Data Protection Bill (PDPB) and financial regulations such as the Reserve Bank of India's (RBI) cybersecurity framework is imperative. Organisations must proactively adapt their AI-driven financial systems to align with regulatory mandates, ensuring transparency, accountability, and consumer trust. Collaborating with regulatory authorities and industry stakeholders fosters a conducive environment for innovation while safeguarding against regulatory risks. Here are ways organisations can thrive amidst GenAI risks:  

Strategic Risk Identification  

The first step for an organisation looking to leverage GenAI is to identify the strategic risks that it poses. This includes assessing the potential for data breaches, the integrity of AI-driven decisions, and the reliability of AI systems. By understanding these risks, organisations can develop strategies to effectively safeguard their high-value data.  

Measuring Data Risk  

Understanding and quantifying the financial impact of data risks is crucial. By knowing the nature of the data you possess and implementing robust protective measures, particularly in the context of GenAI, you can significantly mitigate these risks. Proper discovery and protection techniques can drastically offset disruptions and reduce associated costs by at least 64 per cent.  

Unlocking Opportunities  

Despite the inherent risks, GenAI presents compelling prospects for strengthening cybersecurity measures. By leveraging advanced AI algorithms, organisations can swiftly and precisely identify threats, potentially safeguarding them from substantial financial losses. It’s important to recognise that an effective AI strategy is inseparable from a robust data strategy — ensuring data security is paramount in unlocking GenAI’s full potential.

Ethical AI Practices

Organisations should adopt ethical guidelines for AI development to ensure responsible use of GenAI technologies, implement measures to detect and eliminate biases in AI models to promote fairness and equality, and maintain transparency in AI operations while holding teams accountable for AI-driven decisions.

Continuous Employee Training

Providing regular training to employees on the risks and benefits of GenAI can enhance their ability to work with AI technologies, increase AI literacy across the organisation to help manage AI-related challenges. This will also form cross-disciplinary teams with diverse expertise for comprehensive insights into AI deployment and risk management.

As Indian financial institutions continue to embrace GenAI, a proactive approach to managing financial risk is imperative. By fortifying data security, upholding privacy, and establishing robust governance frameworks, organisations can navigate the complexities of AI integration effectively.

The journey towards a secure, private, and well-governed AI-driven financial landscape is not just about compliance — it’s about building a resilient ecosystem that fosters trust and innovation. Indian financial institutions must lead the way in adopting these proactive strategies to harness the full potential of GenAI while safeguarding against its inherent risks.

In essence, a proactive and multifaceted strategy to cybersecurity is required given the junction of AI and financial risk in the Indian setting. India can protect its financial borders from changing cyberattacks by utilising AI, encouraging teamwork, emphasising cybersecurity knowledge, and implementing flexible legal frameworks.

Saurabh Saxena

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Saurabh Saxena is RVP at OpenText.