Indian banks are working on a coordinated industry response to rising cyber risks, with the Indian Banks’ Association (IBA) developing mechanisms for faster information sharing on cyber incidents and an industry-level sandbox for testing emerging artificial intelligence models.
State Bank of India Chairman C. S. Setty said the initiatives are aimed at helping banks identify vulnerabilities more quickly and strengthen collective preparedness as digitalisation expands the sector’s cyber-attack surface.
One proposed mechanism would enable banks to alert other financial institutions about cyber incidents soon after they occur. While banks already report incidents to regulators and security agencies, faster industry-wide sharing could help other institutions identify similar vulnerabilities and take preventive action.
The IBA has also developed a framework addressing AI-related cybersecurity concerns. An industry sandbox is being considered to provide banks with a controlled environment to test frontier AI models and assess potential security risks before wider deployment.
The initiatives come as banks increasingly adopt AI and digital technologies across operations. Greater use of interconnected systems can improve efficiency but can also create new vulnerabilities that may spread across institutions and technology ecosystems.
Setty said cybersecurity is becoming as important as digitalisation itself, with banks, government agencies and private-sector organisations working collectively to ensure that cyber incidents do not undermine confidence in digital financial services.
For risk and compliance teams, the proposed approach reinforces the importance of collective threat intelligence, rapid incident communication, AI security testing and coordinated cyber resilience.
The development also signals a shift from institution-specific cybersecurity towards greater sector-wide collaboration, recognising that vulnerabilities affecting one financial institution can potentially create risks for others through interconnected systems and third-party relationships.
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