India’s banks have identified 25 original equipment manufacturers, whose devices and applications are widely deployed across the sector, for partnership aimed at addressing risks posed by emerging artificial intelligence (AI) models, people with knowledge of the matter said. This development comes in the backdrop of the banking regulator identifying AI-enabled cyber threats as the top perceived systemic risk to the domestic financial sector.
Additionally, a working group led by State Bank of India is developing a broader framework to help lenders identify potential vulnerabilities and vulnerabilities that could be exploited, as well as strengthen security measures against cyber attacks, according to the people. Apart from the Finance Ministry, Reserve Bank of India (RBI), National Payments Corporation of India and Indian Computer Emergency Response Team (CERT-In), there are nine banks in the working group.
Despite internal controls
According to an Economic Times report, a bank executive, who did not wish to be named, said banks have been asked to reduce the network attack surface area through various means, including deploying defensive AI agents. He said that the preventive measures taken by every bank will be reviewed from time to time.
According to a National Institute of Banking Management working paper published earlier this month, a bank may have strong internal controls, but its exposure to a weak vendor, fintech partner or cloud provider can still increase. Banks often don’t know which open source libraries, AI-powered code or third-party components are embedded in their licensed products, he said.
We have seen this pattern in past supply-chain incidents, where not knowing exactly where a vulnerable component like Log4j was embedded was a major operational problem. He also said that code generated by AI can be reused across multiple identically designed products, allowing the same flaw to spread across institutions that would have no reason to suspect a common point of failure.
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