The next big challenge for banks may not simply be using artificial intelligence to automate lending or detect fraud, but defending against AI-powered threats with AI itself, according to SBI Chairman CS Setty.
Speaking at the Global Fintech Fest 2026, Setty said banks could find themselves in an “AI versus AI” environment, where real-time risk assessment will require lenders to combine identity, behavioural and transactional intelligence. For financial services, he stressed, AI systems cannot operate with a 99% accuracy threshold when the consequences of a mistake can involve customer funds and financial security.
SBI has already been using conventional AI and machine learning across several parts of banking. Setty said the lender was among the early adopters of AI for pre-approved personal loans, while its use has expanded into credit assessment, cash-flow-based lending, early-warning systems, fraud detection, anti-money laundering monitoring and proactive risk management.
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The next phase, however, will involve agentic AI, which Setty said could allow technology to act on behalf of customers and institutions rather than simply provide information or recommendations.
“The real promise of agentic AI is demonstrating financial intelligence,” Setty said, while highlighting its potential to democratise access to financial decision-making.
For India, he argued that the opportunity extends beyond developing larger AI models. Models need to understand the country's diversity and specific economic conditions, making AI built in India for India a potential strategic capability with applications across emerging markets.
But scaling AI in banking will come with its own costs and risks. Setty said the industry will need more affordable computing and cybersecurity infrastructure as AI adoption expands.
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