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Rising cases of online thefts and frauds will push Indian banks that are already lagging behind their global peers in cybersecurity spending to step up, according to Neetu Chitkara, managing director and partner at Boston Consulting Group.
Cybersecurity spending by Indian financial institutions as a part of their revenue is about one-ninth of what is seen at global banks, Chitkara said Wednesday in an interview with Bloomberg Television.
“As you think about increasing digitalization, having consumer trust is very important,” Chitkara said. Cyber breaches can result in a loss of trust and “that is the biggest implication beyond any financial loss or regulatory action.”
India’s financial sector has seen rapid digitalization over the past decade, led by the Unified Payments Interface, or UPI, which allows users to transfer money instantly using their mobile phones. The transformation from physical to digital in the country has however also been accompanied by a surge in online frauds.
Digital payment frauds saw a more than fivefold jump to 14.6 billion rupees ($175 million) in the year ended March 2024 from the previous fiscal year, according to the Reserve Bank of India.
Chitkara said Indian banks also need to invest in technology to handle the larger scale and digital initiatives over the next few years, as they only spend about 5% for their revenue in tech compared to 7-8% by global peers.
--With assistance from Haidi Lun and Avril Hong.
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