FM Sitharaman warns against AI weaponisation, calls for ethical fintech innovation

Citing her own deepfake experience, Sitharaman warned of AI-driven misinformation and urged stronger safeguards, while expressing confidence in AI’s potential if guided by integrity, responsible regulation, and a shared commitment to inclusive, accountable innovation

Addressing the 6th Global Fintech Fest in Mumbai, Finance Minister Nirmala Sitharaman issued a firm call for global cooperation in ensuring technology remains a force for good. In her keynote speech, she warned against the growing trend of “weaponising” digital innovations, particularly in the fields of artificial intelligence (AI) and financial technology.

“Innovation must not become a tool for manipulation,” Sitharaman said, cautioning against the misuse of proprietary technologies. She stressed the importance of maintaining ethical boundaries in an era dominated by rapid technological change, urging global stakeholders to protect the trust and collaboration that underpin digital ecosystems.

Deepfakes and digital trust

Sharing a personal experience, Sitharaman revealed she had been targeted by a deepfake video, underscoring the emerging risks associated with AI-driven misinformation. “The new generation of fraud is no longer about breaking through firewalls, it’s about hacking trust,” she remarked, calling for stronger safeguards to combat digital deception.

Despite these concerns, the minister expressed confidence in the potential of AI to strengthen financial systems—if applied responsibly. She called for innovation built on integrity, regulation that promotes experimentation without compromising accountability, and a collective commitment to inclusive growth.

Sitharaman outlined four key priorities for fintech players: sound business fundamentals, user safety, regulatory responsibility, and bridging gaps in access to finance—especially for MSMEs, women, and gig workers. She also emphasised the need for green financing to support a low-carbon future.

India's digital economy gains momentum

Highlighting India’s digital achievements, Sitharaman said the country now ranks third globally in the number of fintech companies and leads in digital transactions, with over 18,580 crore UPI transactions worth ₹261 lakh crore processed in 2024–25. Nearly half of the world’s real-time digital payments now take place in India.

The minister also announced the launch of the Foreign Currency Settlement System (FCSS) at GIFT IFSC in Gujarat. This real-time settlement infrastructure removes delays traditionally caused by correspondent banking, placing India alongside global financial centres like Tokyo and Hong Kong.

“This is more than a tech upgrade—it’s a strategic leap,” she said, noting that the FCSS will boost India’s credibility as a seamless financial hub.