The RBI conducted a survey assessing the preparedness of financial institutions, which indicated that they have implemented strong practices in cyber risk management, especially in vulnerability assessments and penetration testing of essential information systems.
“AI-enabled cyber-attacks surfaced as the most significant near-term concern,” the RBI noted, reflecting on the growing discussions surrounding technologies like Mythos.
The RBI also stated that processes for regulatory and board-level reporting of major cyber incidents have improved significantly.
Nevertheless, the need for enhanced cybersecurity awareness and employee training remains crucial.
Additionally, there is a necessity for better forensic readiness to enhance incident response capabilities, protect digital evidence, and aid regulatory and law enforcement actions in the case of complex cyber incidents.
In its latest bi-annual financial stability report, the central bank highlighted the AI-fueled stock market surge in certain countries as a potential origin of “financial fragility”.
The remarkable performance of some emerging markets has predominantly been attributed to AI-related companies, rather than broad-based economic strength, according to the RBI.
“Both aspects pose risks of financial fragility, as a downturn in these companies could trigger wider market declines in the US and lead to spillover effects in other markets through wealth impacts,” the RBI report concluded.
