As artificial intelligence becomes increasingly embedded in financial services, it is often presented as a powerful tool for expanding access and improving efficiency.

But as a research team led by Tanushree Kaushal and including Sugandh Saxena, Saishya Duggal, and Stefan Leins shows, the reality is more complex:
AI in finance simultaneously enables inclusion and creates new forms of risk.

From collateral to data

One of the most significant transformations in fintech is the shift from traditional, collateral-based lending to data-driven credit assessment.

By analysing large volumes of data, AI systems can evaluate the creditworthiness of individuals who were previously excluded from formal financial systems.

This has the potential to expand financial inclusion, particularly for underbanked populations.

However, this shift also raises critical concerns.

New risks for consumers

The use of AI in financial services introduces a range of risks, particularly for vulnerable groups.

These include:

• bias and discrimination, through the use of proxy variables in risk profiling;
• Challenges with explainability, with opaque decision-making systems;
• data privacy concerns, linked to the large-scale collection and use of personal information.

As the team highlights, these risks are not always immediately visible, but can have significant long-term consequences for access to financial services.

Bridging research and practice

A distinctive feature of the project is its collaboration with Fintech Association for Consumer Empowerment (FACE), a self-regulatory organisation representing a large share of India’s digital lending sector.

This partnership allows the research to operate at the intersection of academic inquiry and industry practice, providing insights that are directly relevant to regulators and practitioners.

It also reflects a broader objective: to bridge the gap between data studies and financial studies, two fields that increasingly overlap but often remain disconnected.

Towards balanced AI governance

The team emphasises that the challenge is not to reject AI, but to develop frameworks that balance innovation with protection.

AI offers clear benefits in processing large datasets and improving decision-making. But without appropriate safeguards, it can also exacerbate inequalities and undermine trust.

This requires a broader, more holistic approach to policymaking, one that considers not only technological efficiency, but also social impact, economic consequences, and long-term sustainability.

A global perspective

The implications of this research extend beyond India.

As countries around the world explore ways to integrate AI into financial systems, India’s experience may offer valuable lessons, particularly for countries in Africa, where similar questions of inclusion, access, and governance arise.

More broadly, the Indian case is highly relevant to other country contexts in the Global Majority. This is further evident in recent key events hosted by India, including the AI Summit in February 2026.

Looking ahead

The team will present its findings at the AI for Good Global Summit in Geneva (7-10 July 2026) as part of ITU’s Kaleidoscope sessions, on Thursday, 9 July 2026, from 15:30 to 16:30. More information soon.

Their work underscores a central insight:
The future of AI adoption and governance in financial services is contingent on developing clear language and frameworks to understand, govern, and check AI use and any emerging challenges.

About AI for the Global Majority

AI for the Global Majority (AI4GM) is a joint initiative of the Geneva Graduate Institute, Microsoft, and the International Telecommunication Union (ITU) dedicated to supporting innovative, evidence-based, and context-sensitive research on how artificial intelligence can benefit the world’s majority populations.

Bringing together interdisciplinary teams from across regions and sectors, the initiative explores practical pathways for more inclusive, responsible, and impactful AI in areas such as governance, education, health, finance, and digital innovation.

Selected teams will present their work in Geneva as part of the AI for Good Global Summit, contributing to international discussions on the future of AI and global development.