In a significant move to bolster cybersecurity in the banking sector, the Indian Finance Ministry, on November 28, 2023, issued an advisory to banks, urging them to appoint nodal officers to address cyber security concerns. This directive comes in the wake of escalating instances of bank fraud and the growing threat of cybercrimes in the industry.
The Ministry of Finance made several key suggestions to Indian banks, including the appointment of zonal nodal bank officers specifically for responding to cybercrimes, improving information sharing with the Indian Cybercrime Coordination Centre, and implementing stricter controls on withdrawals from inoperative accounts. These measures are seen as crucial steps in enhancing the overall cyber resilience of banks in India.
In alignment with these directives, a report from Deloitte India highlights the urgency and importance of these measures. According to the report, the banking sector, being the most targeted by cybercriminals, experienced nearly 22% of all cybersecurity attacks in India during 2018-19. To counter these threats, the report recommends that banks appoint experienced Chief Risk Officers responsible for employee skill development and leading investment in advanced cybersecurity solutions.
The banking sector’s swift adaptation to digital demands, especially post-COVID-19 lockdowns, has brought several challenges, primarily concerning data security. As banks transitioned to digital operations, including remote working arrangements, they faced heightened cybersecurity risks. Deloitte’s report points out that this surge in digitization led to an increase in cyber attacks, as cybercriminals exploited new opportunities and vulnerabilities.
Furthermore, Munjal Kamdar, a Partner at Deloitte India, emphasized that banks are likely to adopt technologies like mobile, cloud, and remote access, not just to sustain business during the pandemic but also to thrive afterwards. However, he cautioned that this digital transformation would increase the attack surface for banks, necessitating a strategic recalibration to address evolving cyber risks.
The challenges for banks include tackling the increasing sophistication of cybercrimes, ensuring ethical data ownership, efficient data usage, and implementing a robust data sharing mechanism. The Deloitte report also underlines the varying stages of digital transformation and cybersecurity maturity levels among different banks, influenced by their past investments, budget allocations, and customer outreach.
In conclusion, the Indian government’s advisory, backed by insights from industry experts, underscores the urgent need for strengthening cybersecurity measures in the banking sector. Banks are encouraged to prioritize and invest in cyber defense to develop a resilient and agile infrastructure, essential for safeguarding against future cyber threats.