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Capitalizing AI to Benefit Indian Investors With technology playing a driving force in how industries and sectors are operating, one can safely say that financial institutions and systems are optimistically adopting with time.

By Paromita Gupta

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Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India

The means and methods of investing money and raising money have changed over time, and definitely since the barter system was introduced. With technology playing a driving force in how industries and sectors are operating, one can safely say that financial institutions and systems are optimistically adopting with time.

In July 2023, the average Assets Under Management (AUM) of the Indian Mutual Fund Industry stood at a whooping INR 46,37,565 crore, according to Association of mutual funds (AMFI). When lakhs of common citizens and HNIs invest, the company needs to be liable and accountable. However, for the good apples, in terms of Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India, the regulation and supervision should be at a lower level since they've demonstrated good behaviour. That is why Mutual Fund Lite was introduced to move towards a segmented approach because certain kinds of MF businesses do not need the whole rule book.

She further feels AI will help differentiate between good and bad apples at a granular level, "We believe this will allow us to take regulation to a level where the risk management will be almost custom fit for the entity. So it will become a situation where if the entity has really managed its risk well and has demonstrated all the parameters of being a good apple, there will be a level of regulation that will apply, the level of supervision that will apply and so many other things that would apply would at automatically be of a lower level,"

One's hard-earned money deserves all the security and transparency it can get, keeping in mind that the individual investor is aware of all the risks and gains associated with it. You must have read: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. But how many of us actually understand the lines and between the lines of such critical documents? Madhabi Puri Buch, Chairperson, the Securities and Exchange Board of India feel that artificial intelligence can be leveraged to churn out analyzed data and insights for the betterment of Indian investors.

For years, regulators have adopted disclosure-based regulation, which translates to a lot of documents and information available to in public. "Data in the markets is a public good," she notes.

But with AI, it is possible to provide high-quality input and advice to almost all citizens at a no-cost or very affordable price since the disclosed data is available for download free of cost.

"The big opportunity now is that what people consider an information overload in terms of market disclosures that the regulator mandates is actually a gold mine waiting to be analyzed, interpreted insights to be taken and then to be monetized by way of giving high-quality advice to a vast, vast variety of citizens in our country that need that advice," she shares.

Paromita Gupta

Features Writer with Entrepreneur India

Covering news and trends in AI and Metaverse segments. An avid book reader running her personal blog on the side. You may reach me at paromita@entrepreneurindia.com. 
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