SEBI Chairman Tuhin Kanta Pandey clarified that AI-generated alerts are not regulatory findings and emphasized the necessity of human oversight in enforcement decisions. Speaking at the Global Fintech Fest 2026, Pandey highlighted SEBI’s use of AI for cybersecurity compliance, social media monitoring, and surveillance to enhance supervision. The remarks came during a panel moderated by NPCI CEO Dilip Asbe, with participation from IOSCO and Dutch financial market authorities, focusing on AI’s role in financial regulation.
Pandey explained that SEBI is transitioning from periodic checks to proactive, near real-time supervision by leveraging AI’s ability to process large datasets and detect emerging risks. He cited SEBI’s Cyber Security Audit Compliance Portal (CSAC) as an example, which analyzes cybersecurity controls across market participants and flags gaps and non-compliance rapidly. Despite AI’s capabilities, Pandey stressed that regulatory decisions must remain subject to human adjudication, not delegated to AI systems.
The discussion underscored the challenges regulators face in balancing AI’s benefits with the risks of technology-dependent financial markets. SEBI’s approach aligns with global regulators, including the International Organization of Securities Commissions and the Dutch Authority for the Financial Markets, who are exploring AI’s use while maintaining accountability. The move towards more off-site and predictive supervision reflects a broader trend in financial market oversight to enhance efficiency and risk detection.
SEBI’s adoption of AI tools like CSAC aims to make supervision more predictive and timely, shifting from traditional periodic reviews to continuous monitoring. The Global Fintech Fest 2026 provided a platform for regulators to share insights on integrating AI responsibly, with SEBI positioning itself at the forefront of this regulatory evolution.