India’s financial sector is witnessing an alarming surge in cyber threats, driven by rapid digitalization and the increasing sophistication of cybercriminals. As digital transactions become ubiquitous, the sector faces challenges ranging from deepfake scams to ransomware attacks, prompting urgent calls for enhanced cybersecurity measures.

In the fiscal year 2024, cyber fraud incidents in banking transactions escalated dramatically. According to data from the Reserve Bank of India (RBI), the number of cyber fraud cases rose from 75,800 in FY2023 to 292,800 in FY2024, with financial losses increasing from ₹421.4 crore to ₹2,054.6 crore during the same period. The methods employed by cybercriminals have evolved, leveraging advanced technologies to deceive victims. Deepfake technology, for instance, has been used to clone voices and create fraudulent scenarios, leading to significant financial losses. In response, the Indian government has urged banks and fintech companies to incorporate cyber risk assessments into their stress testing frameworks to better prepare for such threats.

The RBI has also taken proactive steps to combat phishing and fraudulent websites by introducing mandatory domain names for banks and non-banking financial companies. Under this initiative, banks are required to use the ‘bank.in’ domain, while NBFCs must adopt the ‘fin.in’ domain, aiming to reduce phishing attacks and enhance customer trust in official banking websites. To bolster cybersecurity infrastructure, the Indian government nearly doubled its cybersecurity budget from ₹400 crore in 2023-2024 to ₹759 crore in 2024-2025. This increase underscores the growing recognition of the need for robust cybersecurity measures across sectors.

In the private sector, companies like Google have launched initiatives such as DigiKavach, an online fraud identification program designed to prevent online financial fraud in India. DigiKavach collaborates with organizations like the Fintech Association for Consumer Empowerment (FACE) and the Cyberpeace Foundation to build awareness about digital literacy and online safety.

Despite these efforts, challenges persist. A report by the Boston Consulting Group highlighted that Indian banks spend significantly less on cybersecurity compared to their global counterparts, investing about one-ninth of what is seen at global banks. This disparity raises concerns about the preparedness of Indian financial institutions to handle the increasing cyber threats.

Prime Minister Narendra Modi, addressing the Global Fintech Fest, emphasized the urgency of combating cyber fraud to safeguard India’s fintech growth. He announced the formation of a ₹1 lakh crore fund aimed at fostering research and development in the country, highlighting the importance of robust cybersecurity systems in the digital age.

As cyber threats continue to evolve, India’s financial sector must prioritize cybersecurity investments, adopt advanced technologies like AI and machine learning for threat detection, and foster collaborations between government and private entities to build a resilient digital financial ecosystem.