PREDICTIABILITY UNDER

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reaj
[Email address]
PREDICTABILITY UNDER
UNCERTAINTY
In the world of finance, uncertainty is an ever-present force, India's financial landscape is
marked by inherent uncertainties, which stem from a variety of factors, including political
dynamics, global economic fluctuations, regulatory changes, and technological disruptions.
The nation's complex and diverse market structure, coupled with the interplay of regional
and global economic forces, contributes to an environment where predicting outcomes can
be challenging. often triggering volatility and influencing market behaviour. Amidst this
constant flux, the Indian market is an evolving economy.
So to cope with this kind of uncertainty we need reliable indicators, At present India have
many indicators like; Gross Domestic Product (GDP), Industrial Production Index (IPI),
Purchasing Managers' Index (PMI), Unemployment Rate, Inflation Rate, Interest Rates, Stock
Market Indexes, Volatility Index (VIX), Consumer Confidence Index (CCI), Business
Confidence Index (BCI), Trade Balance, Current Account Balance, Housing Market Indicators,
Commodity Prices. These indicators provide insights that can be very useful. The power of
the indicators are already tested in the uncertain event called covid, while some indicators
are tracked the situation quite well like production index or inflation , thus providing the
real data to policy makers also unemployemtn rate durig covid was all time high so
obviously we can depend on the indicators. Sometimes the indicators couldnot give the
Insights and it’s my believe that in this volatile world we have to took help of AI ; that can
track the risk of a particular investment and when fed data can anticipate a uncertain event.
The market value of AI in finance was estimated to be $9.45 billion in 2021 and is expected
to grow 16.5 percent by 2030.( BUILT.IN),
INDIA S strategy to include the AI in the finance mainstream has already been started and
the review in the NITI AYOG S STRATEGY -2022 , we can clearly see the govt. trying to
include the AI in the main stream , By the programme titled Future Skills
PRIME (www.futureskillsprime.in) in collaboration with NASSCOM. Also, Global Partnership
on Artificial Intelligence (GPAI), which is an international and multi-stakeholder initiative to
guide the responsible development and use of AI, grounded in human rights, inclusion,
diversity, innovation, and economic growth. With this many skill programmes and also a
portal dedicated to AI.
With these steps the inclusion of AI seems to be quick, along with this behavioural finance is
also important because, Behavioural finance has significant implications for understanding
stock market fluctuations, investor behaviour, asset pricing, and the development of
investment strategies. Financial professionals and investors can benefit from recognizing
and accounting for behavioural biases to make more informed and rational decisions. India’s
investors are learning the behavioural finance in a very rapid way as the emergence of
digital space has seen some of the very good finance influencer Nd stock experts along with
that the reach of network and mobile phone even someone with a very small amount of
knowledge can invest in MFs because of the community and the influencers. With these
most of the investors are overcoming the biases, doing regulated investing. According to the
SEBI the Indians opening demit account has increased to 11 crore comparison to 8.3 crores
in 2022.
In recent years, new technologies, such as the internet finance, Blockchain, artificial intelligence, and
5G, have continued to penetrate the finance, which forms the Fintech. In 2017, the Financial Stability
Board (FSB) proposed that Fintech can create new business models, applications, processes, or
products, which will have an impact on financial markets, financial institutions, or the way in which
financial services are provided (FSB 2017). The Basel Committee on Banking Supervision believes
that international Fintech is mainly active in four areas: payment and settlement, deposits and loans
and capital raising, investment management, and financial market infrastructure. It has created a
variety of financial products and financial services such as digital currency, equity crowdfunding,
Robo-Advisors, and customer identity authentication. The potential impact of Fintech on the
financial industry is mainly reflected in financial stability and access to services. Fintech may
bring profound changes, but it will also bring significant regulatory challenges (Philippon
2015). Faced with the rapid development of financial technology and potential risks, all
countries are actively exploring their own regulatory methods. At present, there are three
main regulatory models in the world. Countries represented by the United States mainly
implement restrictive supervision models, and the direction of supervision is mainly stable;
countries represented by China adopt an inclusive supervision model and adopt a passive,
development-oriented supervision model; The experimental models represented by the
United Kingdom, such as the regulatory sandbox and the newly established framework
model, are also called smart regulation or regulatory technology. Moreover, Fintech has the
dual characteristics of both technology and finance, which may have a greater impact on the
risk behaviours of commercial banks. The stability of banks is also affected by the progress
of information technology and the competitive pressure of Fintech companies, and banks
need to review their competitive advantage to adapt to the new reality. A unique
characteristic of peer-to-peer platforms is that they use digital algorithms to screen a
borrower’s loan application and determine whether it meets their credit standards. The
entire digital lending process is automated such that applicants are not required to talk to
a loan officer or visit a bank branch.
Although commercial banks increasingly rely on similar technologies, they do
not digitise credit processing to the same degree and typically use offline processes and staff
to determine whether to lend to a borrower.
Crucially, unlike banks, peer-to-peer lenders do not accept or use deposits to fund loans.
Instead, after digitally screening borrowers’ loan applications, these platforms list on
an online marketplace the loans in which individuals and institutions can decide to invest.
While investors typically receive a higher rate of return on peer-to-peer investments
compared with bank deposits, they face losses in cases where a borrower defaults and is
unable to repay the loan. Peer-to-peer lending platforms do not invest in loans, but rather
receive a fee for each loan they process.
With this its evident that the fintech space is taking up market of the traditional banks but
the traditional banks are also coping u with it like sibs yono, ICICI
 s pay etc. as both of the sectors have their own unique range of customer base, its possible
that maybe fintech and the traditional banks can coexist.
Atlast in my opinion india is focusing on the AI, its work on the UPI,RUPAY cards is
commendable. And also with all the encouragemnts in the finance sector its good that we
are focusih on personl finance.
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