Artificial Intelligence for Financial Inclusion in India

Summary

Many countries are adopting financial inclusion as a sustainable development goal by incorporating policy‐based changes in the banking and financial sectors. New technologies are being adopted to reach universal financial inclusion. In India, Pradhan Mantri Jan Dhan Yojana (which holds the world record for the highest number of bank accounts opened in a week) and Direct Benefit Transfer (the world's biggest cash and benefit transfer) and, in recent years, the development of digital infrastructure are examples of important policy interventions by the Indian government for inclusive finance. The objective of this chapter is to explore the application of technology, especially AI, in the banking sector for the purpose of financial inclusion in India and to mention some of the examples of commercial banks in India where AI is being used for the purpose of financial inclusion. There are four areas of the banking and financial sectors where artificial intelligence (AI)‐based technology is being adopted. These areas are risk management; personal financial management—the credit score of the customer and the choice of financial products; conversational interfaces—chatbots; and machine vision or voice recognition—facial recognition, voice assistants, biometric identification, and eKYC. The chapter concludes that AI technology can enhance financial inclusion by cutting costs, breaking geographical barriers, and boosting the competition among banks.