central Finance Minister Nirmala Sitharaman on Saturday urged regulated entities in the financial sector to be extremely vigilant against cyber security risks. Without naming AI company Anthropic’s new platform ‘Mythos’, Sitharaman said that it is making cyber attacks faster. He said such tools can automatically discover system vulnerabilities and even avoid detection by adopting methods such as malicious source-code interference.
A single cyber attack can disrupt economic activities
Speaking at the 38th Foundation Day celebrations of Securities and Exchange Board of India (SEBI), Sitharaman said that even a single cyber attack on any stock exchange or depository can disrupt economic activities and affect the confidence of the common people. He said that with the advent of new and advanced AI-based tools, the risk of automated cyber attacks has increased, making the need for cyber security more important.
Attack methods are evolving rapidly
“Not just SEBI, all regulated entities have to remain extremely vigilant. Attack methods are evolving rapidly and defense mechanisms will have to evolve even faster,” the Finance Minister said. The Finance Minister urged SEBI to institutionalize a system of regular consultations with global regulatory bodies, while also clarifying that Indian regulation should not mimic that of other countries.
Call to move towards a common ‘KYC’ system
Sitharaman also called for the financial system to move towards a common ‘KYC’ system for all operations. “It is a shared responsibility of all stakeholders to ensure that no citizen has to repeat the same verification process again and again across multiple financial products and platforms,” he said. He said SEBI’s recent action against unregistered ‘fininfluencers’ (individuals who influence the general public on financial matters) should be seen as the regulator’s seriousness in cracking down on unlicensed financial advice.
Flood of fake investment videos and apps on social media
He said with advances in technology, social media has been flooded with fake investment videos and apps, many of which are using ‘deepfake AI’. The Finance Minister said there is a need to transform investor protection from a “protective function to a developmental function”. He also stressed on making serious efforts to make municipal bonds a more effective platform for raising funds.
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