Paytm is developing an artificial intelligence (AI) system that will help financial institutions capture possible risks and frauds, CEO Vijay Shekhar Sharma said in the payment company’s annual report for the financial year 2022-23 published on August 21.
“In India’s Digital revolution after mobile payments, Paytm’s next contribution will be – small mobile credit with high credit quality and fully compliant with the regulators guidelines. Expectedly this requires sophisticated capabilities in AI and other technologies. I am very proud of our Advanced AI capabilities in use and how we are expanding. We are building an India scale AI system which will help various financial institutes in capturing possible risks and frauds, while also protecting them from new kinds of risks due to advancement in AI.” — Paytm CEO Vijay Shekhar Sharma
Paytm is building an AI software stack that will be available for use in other countries, along with India. “I believe India has an opportunity to become a net exporter of payment technology, software and hardware, and I expect Paytm to lead the way in this,” Sharma remarked.
Why does this matter: The largest number of cyberfrauds and cybercrimes take place in the financial sector given the lucrative monetary rewards. Given the scale and volume of these frauds, the use of AI and other emerging technologies could be more efficient in capturing them. As one of the largest digital payments companies, Paytm has the advantage of access to large amounts of data that can be used to train AI models to detect fraud.
But AI is a double-edged sword when it comes to cybersecurity: While AI can be used to detect cyber frauds, it can also be used to carry out these frauds. As outlined by the Parliament Standing Committee on Finance in its report on cybercrimes and cyber frauds, generative AI models can potentially make it easier for notorious actors to access the means and knowledge to perpetrate cyber crimes. At the same time, the report also outlined how AI can be used to improve cybersecurity:
- Use of AI for carrying out cybercrimes: “We do believe that new generative models, the large language models that are now on the rage in the Al community and around the world, do have the element of making it more accessible by writing code, setting up fake websites, etc., at least some level of technical know-how that people could buy in the past. Now, it makes it a little bit easier to do so. We do expect that there will be more escalation of these kinds of threats with the further prevalence of Al,” Flipkart submitted to the parliamentary committee.
- Use of AI for improving cybersecurity: Meanwhile, India’s IT Ministry and the Reserve Bank of India (RBI) opined that AI can be used to detect cybercrimes and improve cybersecurity. “AI and chatbot technology have significantly influenced the landscape of cyber security and have improved threat detection, enhanced automation, advanced analytics, Intelligent authentication, threat intelligence and prediction, efficient incident response, behaviour-based anomaly detection and in adaptive and self-learning systems,” the IT Ministry submitted. AI is also being used in the banking sector to monitor the “volume, value and velocity of each transaction” for fraud detection, RBI added.
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