LEARNER · GLOBAL
What is RAG and why BFSI is building AI on top of it
Retrieval-Augmented Generation (RAG) is a technique where an AI model retrieves relevant documents or data from a knowledge base before generating a response, letting it cite facts without retraining. Banks use RAG so LLMs can answer customer questions grounded in real contracts, policies, and transaction history.
WHY IT MATTERS
RAG is the production workaround for hallucination in regulated domains; understand it to evaluate any AI vendor pitch for compliance, underwriting, or customer service automation.