Cyber security risk is a key vulnerability in the securities market. The expanding scale of digital financial services, cloud-based infrastructure and interconnected systems across sectors has exponentially increased the cyberattack surface, the Reserve Bank of India’s financial stability report (RBI FSR) stated on Monday.

“As organisations increasingly depend on third-party service providers for their business operations, vulnerabilities in the supply chain could pose systemic risk. Furthermore, over-reliance on a few major IT and cloud service providers has created dependency and vendor lock-in problems leading to concentration risks,” the report added.

“Vulnerability in one system can quickly propagate across networks, affecting multiple entities. Phishing and social engineering attacks are evolving through Generative AI-powered methods, such as deepfakes and contextual frauds. Poorly secured Application Programming Interfaces (APIs), mis-configured databases, weak access controls and insider threats contribute to frequent data leaks and breaches, threatening both customer trust and regulatory compliance,” it added.

Burden on lenders

In this context, cyber-security resilience will depend on lenders’ Security Operations Center (SOC) efficacy, risk-based supervision, zero-trust approaches and AI-aware defence strategies. Graded monitoring mechanisms, the use of behavioural analytics for threat detection, hands-on training, continuous learning and simulation-based exercises are vital for enhancing the resilience of the digital ecosystem.

Published on June 30, 2025