RESERVE BANK OF INDIA deputy governor Rohit Jain warned banks' dependence on a
small number of concentrated cloud service providers, technology vendors and
model suppliers poses a potential financial-stability risk. He said overlapping
datasets and similar infrastructure mean a failure at one vendor could cause
correlated outages or errors across multiple institutions, a view aligned with
global regulators. Jain cautioned automation speed can make errors harder to
contain and urged firms to detect issues early, limit impact and intervene
before small faults escalate. He added that rising model complexity can produce
hard-to-explain decisions and stressed institutions can outsource computation
but not the consequences.
