Sitharaman Urges Banks to Bolster Cybersecurity Against AI Threats

Sitharaman urged all banks to take all necessary pre-emptive measures to secure their IT systems, safeguard customer data, and protect monetary resources.

During the meeting, the Union Finance Minister appreciated the work done by banks so far in strengthening cybersecurity systems and protocols, the Finance Ministry said in a post on X.

She noted, however, that the nature of the emerging threat from the latest AI Model is unprecedented and requires a very high degree of vigilance, preparedness and better coordination across financial institutions and banks.

The Finance Minister advised the Indian Banks' Association (IBA) to develop a coordinated institutional mechanism to respond swiftly and effectively to any such threats.

She also directed banks to engage the best available cybersecurity professionals and specialised agencies to continuously strengthen the defensive and monitoring capabilities of the banks.

Banks were further advised to immediately report any suspicious activity or cyber incident to the relevant authorities, including the Indian Computer Emergency Response Team, and to maintain close coordination with all agencies concerned.

"Emphasising the need for proactive action, the Union Finance Minister urged banks to take all necessary pre-emptive measures to secure their IT systems, safeguard customer data, and protect monetary resources. A robust mechanism for real-time threat intelligence sharing may be established among banks, Indian Computer Emergency Response Team, and other relevant agencies so that emerging threats are identified early and disseminated across the ecosystem without delay," the Finance Ministry said in its post.

The meeting was attended by Department of Financial Services Secretary M Nagaraju, Director General of the Indian Computer Emergency Response Team Sanjay Bahl, senior officials of RBI and NPCI, and MDs & CEOs of Scheduled Commercial Banks.

AI models such as Anthropic's Mythos could pose disruption risks to the growth of India's IT services sector, according to a report by Kotak Institutional Equities.

The report said the model "exhibits a step-jump in benchmark performance across software engineering tasks" and added that it "raises near- to medium-term disruption risks for IT services," particularly for companies with higher exposure to application services.

The brokerage noted that improvements in AI-driven coding could translate into real business impact.

"The realization of similar improvements in real-world scenarios risks turning our estimate of a 3-3.5% annual growth headwind for the industry... from prudent to practical," the report said.

It added that such advancements could also increase downside risks if rapid capability gains continue in future AI models.

Kotak further said the model could "increase efficiencies across all IT services segments" but warned that gains may not be evenly distributed.

- ANI