In 2024, an era where organisations and individuals increasingly operate online, the landscape of cybercrime is evolving rapidly. India, a burgeoning hub for fintech, has experienced a significant surge in cybercrime. In mid-2023, cybercrime complaints in the country soared by 200%, with financial losses reaching ₹168.5 crores. This alarming rise highlights the vulnerability of both individuals and large institutions, including banks and financial entities, to sophisticated cyber threats.
A stark example of this vulnerability was the ransomware attack on China’s Industrial and Commercial Bank (ICBC), the world’s largest lender by assets. This incident underscores a critical point: no entity, regardless of size or perceived security, is impervious to cybercrime.
The ICBC attack is a clear indication that the barriers to executing cybercrime are lowering. Factors such as affordable computing power and the skill set parity between cybercriminals and cybersecurity professionals are facilitating this trend. This dynamic is particularly evident in the fintech sector, where the digital realm’s vast reservoirs of sensitive and profitable information present an irresistible target for cybercriminals.
In the first quarter of the previous year, fintech companies experienced a 2.5-fold increase in cyberattacks compared to the same period in 2021. Indian fintech firms are particularly attractive targets, with 87% of Indian citizens using fintech products (Global FinTech Adoption Index, 2023), significantly higher than the global average. The evolution of technologies such as interconnected systems, cloud computing, and IoT devices has expanded the attack surface, exposing new vulnerabilities that cybercriminals are quick to exploit.
Fintech companies face the daunting task of protecting vast amounts of sensitive data and ensuring the security of financial operations. These firms are responding by adopting secure banking platforms, employing encryption, multi factor authentication, and bolstering communication channels.
One of the most notable advancements in this domain is the use of AI-powered fraud detection systems. For instance, a global fintech leader has implemented a deep learning model that analyses around 75 billion annual transactions across 45 million locations to detect and prevent card-related fraud.
Compliance with regulations such as GDPR and PCI DSS is critical for fintech firms to maintain customer trust and avoid regulatory penalties. The cybersecurity landscape is characterised by a constant arms race between experts and criminals, with both parties possessing comparable skills. To stay ahead, fintech firms are adopting adaptive strategies that combine technical and non-technical measures.
Real-time digital surveillance has become a cornerstone of fintech cybersecurity, allowing firms to identify emerging threats and potential internal vulnerabilities promptly. Fintech companies are also enhancing authentication and authorization mechanisms, implementing robust data backup protocols, and establishing comprehensive disaster recovery plans.
Blockchain technology is increasingly being leveraged by fintech firms to secure data. A survey by Synechron revealed that 94% of top fintech and tech companies are planning blockchain initiatives. Additionally, the adoption of zero-trust architecture, which operates under a default assumption of hostility, is becoming more widespread. According to the ‘Data security in the age of Zero Trust 2021’ study, 62% of participants, including fintech firms, have embraced zero-trust strategies.
Fintech companies are progressively allowing AI to handle routine tasks, freeing human resources for more complex challenges. AI systems are also being used to simulate cyberattacks, testing systems for vulnerabilities. This shift highlights the critical role of AI and ML in modern cybersecurity, moving beyond mere automation to proactive threat detection and system fortification.
The human element, often the weakest link in cybersecurity, is receiving increased attention. Fintech firms are investing in employee training to build resilience against cyberattacks, focusing on areas such as phishing, social engineering, and password security.
One of the most notable advancements in this domain is the use of AI-powered fraud detection systems. For instance, a global fintech leader has implemented a deep learning model that analyses around 75 billion annual transactions across 45 million locations to detect and prevent card-related fraud. Despite, financial institutions keep on educating the customers on social engineering frauds, but the challenge is when customers willingly provide OTPs, payment/banking credentials which resulted misuse in the account. Such frauds have become more sophisticated through man in the middle attacks, remote device access etc while the main reason for such frauds remain as tricking customers for fear and greed, however financial institutions are now using behavioural analytics driven ML models to flag such suspicious patterns which are not in line of the usual customer transactional behavioural. This is helping them to mitigate frauds and even to take decision in real time for pro-active prevention.
The Indian Government’s commitment to data security is evident in the passage of the Digital Personal Data Protection Bill 2023. This legislation outlines protocols for handling data breaches and sets guidelines for legitimate data processing. Government and organisational initiatives are increasingly aligned, strengthening India’s overall cybersecurity infrastructure.
Looking ahead, as government regulations evolve and technologies advance, AI and ML will play increasingly crucial roles in cybersecurity architectures. These technologies are set to revolutionise the way organisations detect threats and respond to cybercriminals, maintaining a critical edge in the ongoing battle against cybercrime.