LEARNER · GLOBAL
What is RAG? Why banks use it to ground LLMs in real data.
RAG (Retrieval-Augmented Generation) is a technique that feeds an AI model real, up-to-date documents—like bank policies or regulatory filings—before it generates an answer. Think of it as giving the AI a reference library. Banks use RAG so AI chatbots cite actual rules instead of making things up.
WHY IT MATTERS
RAG is now table-stakes for compliance and risk AI in BFSI. Without it, LLMs hallucinate (invent facts); with it, they become trustworthy advisors for AML, KYC, and regulatory Q&A.