LEARNER · GLOBAL
What is RAG (Retrieval-Augmented Generation)? A plain-English primer for BFSI engineers
RAG is a technique that augments an LLM with real-time access to external documents or databases. Instead of relying only on weights learned during training, an RAG system retrieves relevant context from a knowledge base (e.g., loan policies, regulatory docs, customer history) before generating a response. This keeps answers current and reduces hallucination.
WHY IT MATTERS
RAG is the practical workaround for deploying LLMs in regulated BFSI without constant retraining; enables banks to serve compliance-sensitive tasks (KYC, lending decision rationale, risk advisory) by grounding LLM output in authoritative sources.