<p>Mumbai: The Reserve Bank on Monday made a case for adopting risk-based supervision, zero-trust approaches and AI-aware defense strategies to tackle online frauds and boost cybersecurity resilience in the financial sector.</p>.<p>The central bank flagged that phishing and social engineering attacks are evolving through generative AI-powered methods, such as deepfakes and contextual frauds.</p>.<p>"The expanding scale of digital financial services, cloud-based infrastructure and interconnected systems across sectors has exponentially increased the cyberattack surface," said the RBI's bi-annual the Financial Stability Report (FSR).</p>.Eight years of GST rollout: Stabilisation in revenue opens doors for reforms.<p>It further said given the systemic interconnectedness of financial entities and technology service providers, ensuring cyber resilience is critical to maintaining trust, stability and business continuity.</p>.<p>As organisations increasingly depend on third party service providers for their business operations, vulnerabilities in the supply chain could pose systemic risk.</p>.<p>Furthermore, the RBI said the overreliance on a few major IT and cloud service providers has created dependency and vendor lock-in problems leading to concentration risks.</p>.<p>Vulnerability in one system can quickly propagate across networks, affecting multiple entities, the report said.</p>.<p>"In this context, cybersecurity resilience will depend on the Security Operations Center (SOC) efficacy, risk-based supervision, zero-trust approaches and AI-aware defence strategies," it said.</p>.<p>Graded monitoring mechanisms, the use of behavioral analytics for threat detection, hands-on training, continuous learning and simulation-based exercises such as through Continuous Assessment-Based Red Teaming (CART), scenario-based resilience drills and uniform incident reporting frameworks are vital for enhancing the resilience of the digital ecosystem, it said.</p>.<p>The Financial Stability Report (FSR) reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the resilience of the Indian financial system and risks to financial stability.</p>.<p>The RBI also said regulators are aligned with these efforts, focusing on digital fraud prevention, secure digital lending, and mutual fund reforms.</p>.<p>The FSDC and its sub-committee continues to play a vital role in building a resilient and secure financial system.</p>.<p>The report further said the rapid growth of digital transactions, though instrumental in enhancing convenience and efficiency, has been accompanied by a significant rise in financial frauds. </p>
<p>Mumbai: The Reserve Bank on Monday made a case for adopting risk-based supervision, zero-trust approaches and AI-aware defense strategies to tackle online frauds and boost cybersecurity resilience in the financial sector.</p>.<p>The central bank flagged that phishing and social engineering attacks are evolving through generative AI-powered methods, such as deepfakes and contextual frauds.</p>.<p>"The expanding scale of digital financial services, cloud-based infrastructure and interconnected systems across sectors has exponentially increased the cyberattack surface," said the RBI's bi-annual the Financial Stability Report (FSR).</p>.Eight years of GST rollout: Stabilisation in revenue opens doors for reforms.<p>It further said given the systemic interconnectedness of financial entities and technology service providers, ensuring cyber resilience is critical to maintaining trust, stability and business continuity.</p>.<p>As organisations increasingly depend on third party service providers for their business operations, vulnerabilities in the supply chain could pose systemic risk.</p>.<p>Furthermore, the RBI said the overreliance on a few major IT and cloud service providers has created dependency and vendor lock-in problems leading to concentration risks.</p>.<p>Vulnerability in one system can quickly propagate across networks, affecting multiple entities, the report said.</p>.<p>"In this context, cybersecurity resilience will depend on the Security Operations Center (SOC) efficacy, risk-based supervision, zero-trust approaches and AI-aware defence strategies," it said.</p>.<p>Graded monitoring mechanisms, the use of behavioral analytics for threat detection, hands-on training, continuous learning and simulation-based exercises such as through Continuous Assessment-Based Red Teaming (CART), scenario-based resilience drills and uniform incident reporting frameworks are vital for enhancing the resilience of the digital ecosystem, it said.</p>.<p>The Financial Stability Report (FSR) reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the resilience of the Indian financial system and risks to financial stability.</p>.<p>The RBI also said regulators are aligned with these efforts, focusing on digital fraud prevention, secure digital lending, and mutual fund reforms.</p>.<p>The FSDC and its sub-committee continues to play a vital role in building a resilient and secure financial system.</p>.<p>The report further said the rapid growth of digital transactions, though instrumental in enhancing convenience and efficiency, has been accompanied by a significant rise in financial frauds. </p>