Institutions cannot outsource accountability, Jain warns
Financial institutions must maintain accountability for algorithmic decisions and prepare for systemic tech concentration risks, Reserve Bank of India Deputy Governor Rohit Jain said at the Global Fintech Fest in Mumbai on September 9, 2026.
No outsourcing of consequence
Jain outlined three primary operational risks amplified by emerging technology: automated execution speed, third-party concentration in cloud and model providers, and algorithmic opacity.
He emphasized that greater technical sophistication cannot dilute institutional responsibility.
“An institution may outsource the computation, but it cannot outsource the consequence,” Jain said.
To address these vulnerabilities, the central bank advocates outcome-based, proportionate regulation rather than prescriptive technical rules.
Supervisory frameworks are adapting through initiatives like DAKSH, PRAVAAH, and the cross-institutional Digital Payments Intelligence Platform.
From Mesopotamia to quantum cryptography
The address anchored technological evolution within a tripartite framework of purpose, prudence, and policy.
Pointing to public digital infrastructure like the Unified Payments Interface, Jain noted that widespread financial inclusion requires intentional design choices such as open interoperability.
He urged institutions to prepare in advance for emerging challenges, including quantum computing risks to cryptographic resilience, while using controlled regulatory sandboxes to test innovations.
Sound doctrine, testing execution
The RBI rightly targets tech-solutionism by insisting that automated models cannot escape legal accountability.
Yet balancing innovation with vendor concentration scrutiny will severely test supervisory capacity across non-banks.
Sound principles are established, but enforcing model auditability remains the real hurdle.