LEARNER · GLOBAL
What is RAG (Retrieval-Augmented Generation) and why BFSI cares
RAG is a technique where an AI model retrieves specific documents or data (e.g., regulatory text, historical transactions) *before* generating a response, instead of relying solely on knowledge baked into training. In banking, this keeps compliance answers current and auditable—the model cites its sources.
WHY IT MATTERS
RAG solves the 'hallucination' problem: instead of LLMs inventing plausible-sounding rules, RAG grounds answers in real policy. Mastercard and others now deploying RAG-based compliance chatbots and risk workflows.
Source: AITechHive Learning · 2026-10-24