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SEBI takes artificial intelligence (AI) route to reduce instances of mis-selling in capital market products like mutual funds.
Madhabi Puri Buch, Chairperson, SEBI said that the market regulator has been leveraging AI tools to detect possibility of mis-selling by mutual fund distributors or stock brokers. She was speaking at the Global Fintech Fest held today in Mumbai.
Madhabi said that the market regulator will put algos based on which the system will detect potential mis-selling by brokers and distributors. For instance, there is a possibility of mis-selling if a 90-year-old person buys 7 year closed end equity fund.
While the system will be capable to detect such instances, it has to be further investigated to evaluate it better. This way, the market regulator will be able to separate bad apples, said the chairperson.
Talking about the regulatory roadmap, Madhabi said that the market regulator focusses on optimizing three things – risk, convenience and costs. She said that the cost of running the business has to come down to attain financial inclusion.
Further, Madhabi said that SEBI is working on granular regulations to give impetus to fintech.
