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Informist, Friday, Aug. 7, 2026

 

NEW DELHI – The "recent disturbing revelations" about artificial intelligence agents violating other AI applications point to the risks associated with using AI, which are often ignored until they are a reality, Chief Economic Adviser to the Government V. Anantha Nageswaran said Friday. The financial sector must first take steps to handle the security aspect of AI before leveraging its benefits to ensure "we don't lose what we already have," Nageswaran said. 

 

"..whether it is the Anthropic or Meta agents going and hacking other institutions' IT systems without being prompted to do so, I think the key aspect to be clear is that we don't pay attention in general to risks that well until and after they have become a reality," he said at the Associated Chambers of Commerce and Industry of India's Fintech Festival. "I think that is where our focus should be because I don't think we will have the luxury of time, particularly in the financial sector," he said. 

 

Security concerns from Claude Mythos Preview, a highly advanced artificial intelligence model developed by the US-based Anthropic PBC, had blown up in April after unauthorised access was made on its new model Mythos, which was deemed too dangerous for public release. The company had chosen to restrict access to the new model to select partners because of its unprecedented ability to autonomously detect and exploit software vulnerabilities. 

 

At that time, the Indian financial sector--which did not have access to the programme--had to quickly ramp up its security provisions to fight such unauthorised access. Eventually, several Indian companies in the cybersecurity, telecommunications, finance, and banking industries received early access to Anthropic's Claude Mythos model in June. 

 

Artificial intelligence will help the financial sector in ways that it is necessary and useful, like flagging risks of stress or default, "but it is important to ensure that AI is a tool or filter for exclusion," the government's top economist said. He also cautioned against assessing the economic benefits of artificial intelligence amid the current enthusiasm surrounding the technology. He said a clearer cost-benefit assessment would only be possible after the financial market bubble around artificial intelligence deflates. "Only when the current financial market bubble in AI deflates, we will be able to do a proper cost-benefit analysis of AI," he said.

 

Speaking about the growth of the fintech sector as a multiplier of the economy, Nageswaran said he does not think governments must actively target that as a policy. "If they (governments) end up targeting mid-length activity, or in general, financial sector activity itself, to become a certain multiple of the size of the economy, then I think we will end up killing the goose, which is the economy itself," he said. "When we end up putting the financial part before the real economy part, then it doesn't serve either the real economy." The government must ensure that the regulatory environment is predictable, stable, consistent, and does not stand in the way of legitimate economic activity and financial sector growth, he added. 

 

On the growth of cross-border payments, Nageswaran said that the mechanism will succeed when there is a material trade between the participating nations. "...the value of trade between these two nations has to go substantially enough that a settlement in the respective currencies begins to make economic sense." Transfers between residents of two countries and for settling the commercial transactions in the respective currencies, rather than the third currency, also depends on the size and the clout of the economy and the volume of transactions that happen, he said. 

 

The government has laid down the regulatory backbone to facilitate cross-border payments and its uptick will depend on the growth of financial transactions, bilateral trade, and the general economic activity. "Therefore, whatever we are doing currently with respect to cross-border payment facilitation, more important is to facilitate growth in the volume of trade in goods and services," Nageswaran said.

India has been trying to expand cross-border payments, especially through the adoption of the Unified Payments Interface by QR code-based merchants. It is currently operational in Bhutan, France, Mauritius, Nepal, Qatar, Singapore, Sri Lanka, and the United Arab Emirates, according to the Reserve Bank of India.  End

 

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

 

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