Mumbai, (PTI) Finance Minister Nirmala Sitharaman on Tuesday emphasised the importance of risk management for fintech firms amid the rise of AI-enabled crimes, where criminals are using AI to mimic voices, clone identities, and create lifelike videos to manipulate people.
 

Speaking at the 6th edition of the Global Fintech Fest 2025, she said India has the potential to become a global hub for developing AI products and services. "India can also build AI products that fit diverse use-cases across the world. It can be a laboratory for developing and testing AI ideas," she noted.
 

During the event, Sitharaman launched the Foreign Currency Settlement System (FCSS) at GIFT IFSC, designed to settle foreign currency transactions on a real-time or near real-time basis. With the operationalisation of FCSS, GIFT IFSC joins a select group of global financial centres—including Hong Kong, Tokyo, and Manila—that can settle foreign currency transactions locally.
 

Highlighting AI’s transformative potential, the minister said, "Our AI stack must be rooted in Indian languages, local contexts, and multimodal interfaces so that it can be widely accepted and accessed by our citizens." She added that a focused approach across the AI stack could make India the AI torchbearer for the Global South.
 

While AI opens extraordinary possibilities, Sitharaman cautioned about its darker side. "The same tools that power innovation can be weaponised for deception and fraud. I have seen several deepfake videos of myself being circulated online, manipulated to mislead citizens and distort facts. It was a reminder of the urgency with which we must strengthen our defences," she said.
 

She added that the new generation of fraud is no longer about breaching firewalls; it is about hacking trust.
 

Sitharaman also highlighted that fintech in India is no longer a niche urban convenience but a nationwide enabler of economic empowerment. "India's fintech journey has transformed everyday payments into an invisible and inseparable habit, powered by UPI and digital public infrastructure," she said.
 

"This is a good moment to reflect on what kind of financial future we wish to build and how we get there. Fintechs must focus on fundamentals such as revenue growth, innovative product offerings, profitability, risk, and compliance capabilities," she added, emphasising that responsible regulation is not a brake on progress but a seat belt for safe acceleration.
 

The minister noted that the fintech sector must help cover the remaining gaps in the financial ecosystem. In the span of a single decade, India has connected a population equivalent to the European Union to the formal banking system, opening over 56 crore Jan Dhan accounts.
 

India now ranks third globally in terms of fintech companies and leads in digital payment volumes, processing over 18,580 crore UPI transactions worth Rs 261 lakh crore in 2024-25. Nearly half of the world's real-time digital transactions occur in India, with adoption rates of 87% compared to the global average of 67%.
 

She highlighted the government’s digitisation efforts, such as the Direct Benefit Transfer (DBT) system for social welfare schemes, which have significantly reduced subsidies and leakages, saving Rs 4.31 lakh crore and increasing beneficiary coverage sixteen-fold between 2014 and 2024. The shift from paper-based disbursals to direct digital transfers ensures public funds reach the intended recipients.
 

Finally, Sitharaman emphasised leveraging India’s large digital population of 650 million smartphone users to create scalable models beyond finance, including healthcare, education, agriculture, MSMEs, and exports.