A parliamentary committee revealed that the finance ministry has integrated artificial intelligence (AI) into systems for detecting cybercrime and financial fraud in tax and financial intelligence networks. Key tools, such as FINnet 2.0, employ AI and machine learning (ML) for real-time anomaly detection, entity resolution, and predictive modeling. While the Financial Intelligence Unit-India (FIU-IND) utilizes these AI-driven systems for monitoring suspicious transactions, the Directorate of Enforcement (ED) has yet to implement any AI tools in its money laundering investigations. The ED primarily relies on traditional methods but acknowledges AI’s potential to analyze large datasets, prioritize high-risk cases, and expedite investigations. Additionally, AI can enhance tax fraud detection by identifying fraudulent Input Tax Credit claims and suspicious transaction patterns. Overall, AI offers transformative capabilities in fraud detection and compliance monitoring, yet the ED emphasizes the need for human oversight before deploying such technologies.
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