AI a catalyst for financial inclusive growth: Finance Ministry official

India's fintech ecosystem is entering a transformative phase driven by artificial intelligence (AI), with the potential to redefine financial inclusion, trust, and efficiency, a senior official from the Ministry of Finance said.

Addressing the AI-in-Fintech Bharat Conclave in Bengaluru on Friday, Nagaraju M, Secretary, Department of Financial Services (DFS), Union Ministry of Finance, said AI is no longer a marginal technological upgrade but a “horizontal, foundational capability” cutting across payments, lending, risk management, compliance and customer engagement.

“When applied responsibly, AI can become a force multiplier for fintech, enhancing scale while deepening inclusion,” he said at the summit, organised by India Fintech Foundation (IFF) and the Unified Fintech Forum (UFF).

The official highlighted that India’s strong digital public infrastructure, including Aadhaar, UPI, Account Aggregator, DigiLocker, and the Unified Lending Enterprise, provides a solid foundation for the responsible and scalable adoption of AI.

According to Nagaraju, the government views AI as a key catalyst for inclusive growth, fully aligned with national priorities of financial inclusion and digital empowerment.

Emphasising trust-centric innovation, he said AI deployment in financial services must be guided by ethics, fairness, transparency, and accountability. “Technological advancement must enhance financial services without compromising consumer safety or systemic stability.”

He added that AI should actively support MSMEs, women entrepreneurs, gig workers, small farmers, and rural populations.

Nagaraju highlighted the role of AI in strengthening fraud detection, anti-money laundering monitoring, and risk forecasting, especially amid rising cybercrime. “Cyber fraud has become a nationwide challenge, and AI must be used not only by criminals but also by institutions to prevent it,” he said.

At the event, the secretary also announced that a new India Digital Public Intelligence Platform, backed by public sector banks and open to fintech participation, is expected to be operational in the coming months to counter cyber fraud using advanced technologies.

On regulation, Nagaraju pointed to the Reserve Bank of India’s proposed Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI), which aims to balance innovation with risk mitigation. He said collaboration among the government, regulators, self-regulatory organisations and industry will be critical to ensuring safe and responsible AI adoption.

Looking ahead, Nagaraju stressed the importance of building indigenous AI capabilities tailored to India’s socio-economic realities. “This is not about chasing technology for its own sake, but about using it to improve lives, expand access and protect trust in the financial system,” he said. “Responsible AI will help build an inclusive, resilient and globally competitive fintech ecosystem.”