Indian Banks Embrace AI for Financial Crime Compliance Amid Fraud, Regulatory Push: KPMG

• Indian banks are rapidly integrating AI and machine learning into Financial Crime Compliance (FCC) operations due to rising fraud and regulatory scrutiny.
• This shift involves moving to AI-driven frameworks for Anti-Money Laundering (AML), fraud detection, and customer risk assessment.
• Regulatory expectations, including RBI's FREE-AI and SEBI's guidelines, are accelerating the adoption of responsible and explainable AI systems.
• Over 15 Indian banks utilize RBI Innovation Hub’s MuleHunter.AI tool, with one achieving 95% accuracy in detecting mule accounts.
• KPMG emphasizes the need for independent validation and proper stress-testing of AI systems to manage model risk and prevent potential systemic risks.

Why It Matters: Your bank is using AI to fight financial crime, improving security and risk management.