The Rise of the Algorithmic Advisor: How Artificial Intelligence Is Reshaping Financial Decision-Making in India
TL;DR
It is concluded that AI is not replacing human financial judgement in India but is compressing the distance between institutional and retail decision-making, while regulatory and behavioural safeguards remain works in progress.
Abstract
Artificial intelligence (AI) has moved from the periphery to the centre of financial decision-making in India, reshaping how individuals invest, borrow, and manage money, and how institutions underwrite risk and serve customers. This paper examines the extent and character of AI's influence on financial decisions in India across three domains: retail investment and wealth management, credit assessment and digital lending, and core banking operations including fraud detection and customer engagement. Drawing on regulatory reports, industry data, and secondary literature, the paper finds that AI-enabled robo-advisory platforms, algorithmic trading tools, and alternative-data credit scoring models have expanded financial access and lowered costs, particularly for younger, first-time, and previously underserved participants. At the same time, the Reserve Bank of India's Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) reflects growing regulatory recognition of risks such as algorithmic bias, reduced explainability, and overconfidence in automated advice. The paper concludes that AI is not replacing human financial judgement in India but is compressing the distance between institutional and retail decision-making, while regulatory and behavioural safeguards remain works in progress. Keywords: artificial intelligence, financial decision-making, India, robo-advisory, credit scoring, RBI, fintech