Reserve Bank of India Deputy Governor Rohit Jain
Reserve Bank of India Deputy Governor Rohit Jain on Wednesday flagged three key concerns — speed, concentration and opacity — as emerging technologies become more deeply embedded in finance.
While none of these risks are entirely new, technology can amplify them and allow their effects to travel through the financial system in ways that are faster, wider and sometimes harder to detect, Jain cautioned in his keynote address at the Global Fintech Fest 2026.
Not just prevention
With regard to speed,the Deputy Governor noted that automated systems can analyse information and initiate actions far faster than human beings can respond. “At machine speed, resilience cannot depend only on preventing every error. Institutions must also be able to detect problems early, contain their effects and intervene before a small mistake becomes a much larger one,” he said.
On concentration, Jain observed that financial institutions may increasingly depend on a relatively smaller number of cloud providers, technology vendors and model providers, often using overlapping datasets and similar technological infrastructure.
The concern, therefore, is not simply the failure of one institution, but the possibility that a common dependency could transmit disruption or error across many institutions at the same time.
When it comes to opacity, the Deputy Governor said advanced models can identify relationships and arrive at decisions in ways that may be difficult to explain. Greater sophistication, however, cannot mean weaker accountability.
“An institution may outsource the computation, but it cannot outsource the consequence. A customer affected by an important financial decision deserves something more meaningful than being told that ‘the model said so’,” he said. “These concerns arise in a financial system whose underlying risks remain familiar. Borrowers can still default, liquidity can still disappear, leverage can still magnify losses, and operational failures can still disrupt financial services. Technology does not make these risks vanish. Instead, what it can change, sometimes significantly, is their speed, scale and transmission.”
Creating a balance
The Deputy Governor opined that prudence must also extend to risks that may not yet be immediate. Quantum computing offers a useful example. It holds significant promise, but it also raises questions about the resilience of current cryptographic systems.
“Preparing in advance reflects a broader principle: we should not wait for a future vulnerability to become a present crisis before responding. Prudence, therefore, is not about resisting innovation. It is about ensuring that innovation remains resilient as it scales.
“Yet this creates a difficult question for policymakers. Technology may evolve faster than our ability to foresee all its consequences. When should policy intervene, and how can it do so without closing off useful innovation? This is not an easy balance to strike,” he said.
“Regulate too early, and we risk writing detailed rules for a technology we do not yet fully understand, or for an architecture that may change before the rules take effect. Regulate too late, and the technology may already be deeply embedded before its risks are fully understood and addressed. There is no perfect point between these two outcomes,” Jain added.
‘Think of the user’
He emphasised that amid all discussions about algorithms, tokens, platforms, cloud infrastructure and quantum computing, financial ecosystem players should not forget that there is always someone at the other end of the technology.
“There is a saver entrusting an institution with hard-earned money, a borrower seeking an opportunity, a merchant awaiting a payment, or a family depending on the financial system when it matters most. That is ultimately where our responsibility lies.
“Most customers will never know which model made a recommendation, which cloud hosted it or which technology enabled a transaction. They will, however, experience the outcome. Their confidence in technology will ultimately depend not on how sophisticated it is, but on whether it works for them fairly, reliably and safely,” Jain said.
Purpose, prudence and policy, therefore, have to move together. Purpose without prudence can become recklessness. Prudence without purpose can become stagnation. Policy is what binds the two together at scale. The objective should not merely be to make finance faster or smarter, but to ensure that technological progress makes finance more useful, resilient and responsive to those it serves.
Published on September 9, 2026
