Banks need something new, far more versatile: Nirmala Sitharaman on AI cyber threats

Finance Minister Nirmala Sitharaman said on Friday that the challenge posed by advanced artificial intelligence (AI) is fundamentally different compared to what the country's commercial banks have had to mange until now. Sitharaman inaugurated a new State Bank of India office in Kharadi, Pune. She urged banks to adopt a more versatile and proactive approach to counter emerging AI-driven cyber threats.

SBI is moving towards meeting the aspirations of 2047 for the country, she said.

Cautioning bank chiefs that existing safeguards may no longer be sufficient in tackling this threat, she said: "This has been an ongoing exercise and Indian banks have done very well for themselves that there has not been a major incident over the decades... What we've had and therefore proved ourselves -- that we are careful and protective of our customers -- may not be sufficient. They need to be there; they need to improve; they need to grow."

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"But we need something new and something far more versatile to counter the newer threats which are likely to come," she added.

Commercial banks in the country have remained largely free of any major incident involving cyber security violation over decades because of sustained digitisation, regular system upgrades, firewalls and customer safety measures, she said.

Her remarks came a day after she chaired a high-level meeting with Electronics and IT Minister Ashwini Vaishnaw to assess emerging cyber threats linked to AI. Officials from the RBI, NPCI and CERT-In, and chiefs of scheduled commercial banks were present in the meeting. The DFS Secretary M Nagaraju and CERT-In DG Dr Sanjay Bahl participated in the meeting.

The central government has directed commercial banks to work under a coordinated institutional mechanism, driven by the Indian Banks' Association.

She also said that several interactions will be conducted with banks in this regard going forward. SBI Chairman CS Setty, who also heads the IBA, will lead the efforts.

Today, people are doing banking on phone but human intervention is important and is the spirit of getting inclusion in banking, she said. This can guide one well in investments, added the Union Minister.

She also said that there is a need to revive legacy industrial clusters in Maharashtra.

"We are prepared to meeting all challenges which are tech related," noted the finance minister.

The finance minister speaking at the SBI event in Pune

Strait of Hormuz crisis

The finance minister acknowledged the impact of the ongoing West Asia crisis. "Because of the Strait of Hormuz crisis, we'll see what best we can do. These are constantly moving challenges. You can't club all of them and say each challenge is being addressed," said Sitharaman.

She also reiterated that a group of ministers is closely monitoring the supply of LPG in the country in light of disruptions in the Middle East.

Speaking about the West Asia crisis, the finance minister noted that domestic consumption and yields are doing well even when there is economic instability.

The exports are "doing alright", she said, as traders are able to find newer markets.