“The next 25 years will not just be about scale, but about intelligent scale. Financial markets are now evolving in the fastest ways possible, becoming more interconnected and complex.”CS Setty,chairman, SBI
Mumbai:Artificial intelligence will play a central role in transforming financial market infrastructure by strengthening risk management, improving operational efficiency and enabling real-time market surveillance, State Bank of India chairman CS Setty said on Wednesday.
“Artificial intelligence (AI) will be a defining force in this transformation, having the potential to significantly enhance risk management, improve operational efficiency and enable real-time market surveillance,” Setty said while addressing the 25-year milestone celebration of Clearing Corporation of India (CCIL) in Mumbai.
AI will define the next 25 years of finance, enabling intelligent scale and real-time risk management, said Setty.
“The next 25 years will not just be about scale, but about intelligent scale. Financial markets are now evolving in the fastest ways possible, becoming more interconnected and complex,” he said.
He also noted that risks will develop in ways that are less visible but potentially more systemic.
Setty said AI could transform operational processes by leveraging large volumes of transaction and market data.
“By analysing vast data sets of historical transactions, counterparty behaviour and market conditions, AI can enable dynamic management, real-time risk assessment and more accurate prediction of counterparty exposures,” he said.
He added that AI and machine learning can also automate repetitive processes such as clearing, settlement and reconciliation, reducing operational overheads while improving speed and accuracy.
Highlighting the broader shift in the role of clearing institutions, he said technology could enable a more proactive approach to managing financial system risks.
“In many ways, this represents a shift from being a post-trade processor to becoming a preemptive risk sentinel, one that not only manages risk but anticipates it,” he said.
Further, he added that new asset classes will emerge, cross-border flows will intensify, and risk will develop in ways that are less visible, but potentially more systemic.
“In this dynamic environment, CCIL’s role will become even more strategic.”
CCIL is uniquely positioned to lead the next phase, considering its track record of innovation, strong risk management framework and close alignment with regulatory vision, Setty said.
The SBI Chairman also commended CCIL for seamlessly executing a huge jump in transaction volumes, saying this reflects the growing depth, confidence and sophistication of India’s financial markets.