FM Sitharaman Urges Banks to Strengthen Defences Against AI Threats; Flags West Asia Risks

Union Finance Minister Nirmala Sitharaman has called on Indian banks to strengthen their cybersecurity frameworks in response to emerging risks from artificial intelligence, as per The Economic Times report.

Speaking after a recent review meeting, she highlighted the need for more adaptive and forward-looking systems. Alongside digital threats, she also noted ongoing geopolitical developments in West Asia that could impact the broader economic environment.

Rising Concerns Around AI-Driven Threats

The Finance Minister emphasised that advancements in artificial intelligence are creating new forms of cyber risk that differ from traditional threats. While Indian banks have maintained a steady track record in safeguarding digital systems, she indicated that evolving technologies require more flexible and advanced protective measures.

Coordinated Approach Among Institutions

A high-level meeting involving key stakeholders, including banking regulators, technology authorities, and financial institutions, reviewed preparedness against such risks. Banks have been advised to collaborate through an institutional mechanism led by the Indian Banks’ Association to assess vulnerabilities and strengthen resilience.

Focus on Technology and Investment

Financial institutions are expected to evaluate areas requiring additional investment, including cybersecurity infrastructure and emerging technologies. The approach also includes exploring the use of artificial intelligence tools to counter potential AI-based threats.

Strengthening Monitoring and Response Systems

The minister highlighted the importance of real-time monitoring, early detection, and swift reporting of suspicious activities. Banks have been encouraged to work closely with cybersecurity agencies to enable timely information sharing and coordinated responses to potential threats.

Talent and Expertise in Cybersecurity

There is also a focus on enhancing human resources in cybersecurity, with banks urged to engage specialised professionals and agencies. This step is intended to improve defensive capabilities and maintain system integrity as risks evolve.

Geopolitical Developments in Focus

In addition to digital security concerns, Sitharaman referred to ongoing tensions in West Asia, particularly developments affecting the Strait of Hormuz. These factors may influence global crude oil prices and require continuous monitoring due to their potential economic implications.

Read More: DoT, SEBI Join Hands to Curb Telecom-Linked Financial Frauds.

Conclusion

The Finance Minister’s remarks underline the need for Indian banks to adapt to a changing risk environment shaped by technological advancements and global developments. A coordinated and forward-looking approach is expected to play a key role in maintaining stability within the banking system.

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