Walk into any bank’s office today, and you’ll see posters about phishing, fraud awareness sessions, and long compliance checklists stuck on cubicle boards.
Finance professionals know they’re under attack—but most still underestimate how deeply cyber risks have woven themselves into daily banking operations.
The numbers are uncomfortable to look at. According to a report highlighted by LiveMint, India saw a 50% rise in cyber fraud in banking and financial services in 2023.
Here’s the article:
https://www.livemint.com/money/personal-finance/banking-sector-witnesses-spike-in-cyber-fraud-report-11702312217112.html
And that’s just the fraud that gets reported.
The quieter incidents—data leaks, internal access misuse, fake KYC submissions, credential stuffing—are happening every single day.
Why the Finance Sector Faces Such Advanced Threats
If you ask cybersecurity analysts why attackers love the financial sector, you’ll get a simple answer:
“That’s where the money is.”
But the deeper reason is this: banks depend on interconnected systems more than any other industry.
1. Every System Talks to Every Other System
Trading platforms talk to lending systems.
Payment apps talk to bank cores.
UPI APIs talk to dozens of third-party apps.
One weak integration can open the door to everything.
2. Attackers Use Highly Targeted Techniques
Generalised phishing is outdated.
Today’s financial attacks involve deepfake audio, spoofed SWIFT instructions, and AI-generated KYC documents.
Reuters recently covered a case in Hong Kong where deepfake video conferencing was used to trick a financial manager into transferring millions:
https://www.reuters.com/world/asia-pacific/hong-kong-police-warn-over-deepfake-scams-after-fraudster-uses-ai-impersonate-2024-02-05/
If it can happen there, it can happen here.
3. High Pressure + High Volume = More Mistakes
During peak trading hours or month-end reconciliation, even experienced teams can miss subtle signs of compromise.
How Cybersecurity Improves Risk Management in BFSI
The banking sector already has strong compliance requirements, but compliance isn’t the same as security.
True risk reduction comes from:
1. Behaviour Analytics
Instead of waiting for fraud alerts, banks now track unusual patterns—like a staff member accessing 10x more records than usual.
2. Securing Third-Party APIs
UPI and digital wallets have opened incredible opportunities, but each new API is a new entry point for attackers.
3. Strong Identity Governance
Limiting internal access is one of the biggest wins in financial sector cybersecurity.
4. Faster Incident Response
A slow response can lead to cascading failures between payment networks, CBS systems, and partner integrations.
A Financial Sector Example the Industry Still Talks About
In 2020, attackers hacked into Canara Bank’s payment switch and attempted fraudulent withdrawals. It was widely reported by The Hindu BusinessLine:
https://www.thehindubusinessline.com/money-and-banking/canara-bank-hit-by-cyber-attack-bhiwandi-branch/article33008466.ece
The breach was contained—but only because monitoring caught the unusual pattern quickly.
What the incident taught the industry was simple:
Internal systems can be a target too. And monitoring has to be real-time, not next-day.
What Financial Institutions Should Look for in a Cybersecurity Solution
- Real-time monitoring
- Strong identity governance
- API security
- Threat intelligence specific to BFSI
- SOC with incident response expertise
- Compliance support (RBI, PCI-DSS, ISO, DPDP)
A cybersecurity tool is not enough.
Banks need a partner that understands the messy, interconnected nature of financial systems.
FAQs
- Why does the financial sector face advanced cyber threats?
Because attackers know that even small vulnerabilities can lead to direct financial gain, and because banking systems are deeply interconnected.
- How can cybersecurity improve risk management for BFSI companies?
By detecting unusual patterns early, securing internal access, protecting APIs, and tightening identity governance.
- What should a financial institution look for in a cybersecurity solution?
24/7 monitoring, threat intelligence, compliance alignment, strong authentication controls, and rapid response capabilities.
