THE ROLE OF ARTIFICIAL INTELLIGENCE IN ADVANCING DIGITAL FINANCIAL INCLUSION IN INDIA: TECHNOLOGIES, CHALLENGES, AND POLICY IMPLICATIONS

India’s digital financial environment has witnessed drastic change, largely spurred by the exponential growth of sophisticated technologies. Of these, Artificial Intelligence (AI) is increasingly being recognized as a key driver in how financial services are accessed, tailored, and supplied, particularly in underserved areas. This review paper discusses the changing role of AI in deepening digital financial inclusion in India, a country with deep contrasts in digital penetration, banking coverage, and socioeconomic progress. The review starts with a review of fundamental AI technologies that are transforming financial services, such as natural language processing, predictive analytics, and machine learning. It analyzes actual implementations of these technologies by Indian FinTech companies and public programs that seek to overcome access gaps. This article also examines how AI-based solutions—varying from autonomous credit scoring tools to smart mobile platforms—are redefining the outreach efforts of banks and financial institutions to reach heretofore excluded segments without depending on large physical infrastructures. But the deployment of AI-based inclusion models is not without obstacles. This review critically examines issues of algorithmic bias, data protection, cybersecurity, infrastructure constraints, and the imperative for explicit regulatory guidelines. Overall, the paper provides insight into policy transformations and technological partnerships required to create inclusive and responsible AI deployment. The research adds to the ongoing discussion by providing an organized assessment of AI’s possibility to redefine access, trustworthiness, and equity within India’s digital financial system.