Cybersecurity – Indian Banks Face Rising Fraud Risks as AI Threats Intensify
Cybersecurity – Indian banks are witnessing a significant increase in fraud-related risks as artificial intelligence continues to transform the financial industry. A recent survey conducted by BioCatch indicates that financial institutions across the country are experiencing growing pressure from increasingly sophisticated fraud techniques, many of which are linked to emerging AI technologies.
The study revealed that concerns about financial crime have intensified among banking professionals in India. The survey gathered responses from 1,440 experts involved in fraud prevention, anti-money laundering operations, risk management, and compliance across 25 countries. The findings show that India ranks among the most affected markets when it comes to fraud threats and AI-driven criminal activity.
Growing Concern Over AI-Driven Vulnerabilities
One of the most notable findings from the report is the increasing concern surrounding AI-powered systems. According to the survey, 84 per cent of respondents identified AI agents as the most vulnerable area that could be exploited by fraudsters over the next year. Industry leaders believe that the rapid development of artificial intelligence is creating new opportunities for cybercriminals to target financial institutions.
Fraud Attempts Continue to Increase
Among the 100 banking and financial crime prevention executives surveyed in India, 90 per cent reported a rise in fraud attempts during the past 12 months. This figure is considerably higher than the global average of 81 per cent and represents a sharp increase compared to the previous survey, when 70 per cent of Indian respondents reported similar concerns.
The report also highlighted a notable rise in financial losses linked to fraud. Around 84 per cent of Indian banking leaders said their organisations experienced increased fraud-related losses over the last year. In comparison, the global average stood at 76 per cent. The figure has climbed significantly from the previous year’s level of 57 per cent in India.
Financial Institutions Report Heavy Losses
The economic impact of fraud remains substantial for many banks and financial institutions. Nearly half of the respondents in India stated that their organisations lose more than USD 10 million annually due to fraudulent activities. A significant share reported even larger losses, with some institutions facing annual fraud-related costs exceeding USD 25 million, USD 50 million, and in a few cases more than USD 100 million.
Customers Also Suffer Major Financial Damage
The survey found that financial fraud is not only affecting institutions but also causing serious losses for customers. More than half of the respondents estimated that customers lose over USD 5 million every year through scams and authorised payment fraud. A considerable number also reported customer losses exceeding USD 10 million annually.
Speed of Fraud Becoming a Major Challenge
Indian banking leaders expressed strong concern about how quickly fraudulent transactions and scam attempts are evolving. As many as 95 per cent of respondents said they are highly worried about the increasing speed of fraud activity. This level of concern is significantly above the global average, reflecting the scale of the challenge faced by financial institutions in India.
Instant Payments Create New Risks
The survey identified instant payment platforms as one of the leading sources of fraud growth. Around 66 per cent of Indian respondents pointed to scam attempts linked to real-time payment systems as a major contributor to rising fraud cases. Researchers noted that the widespread use of digital payment services, including UPI, may be providing fraudsters with additional opportunities to exploit users and financial networks.
Industry Calls for Stronger Fraud Prevention Measures
Commenting on the findings, BioCatch Chief Executive Officer Gadi Mazor said artificial intelligence is reshaping customer interactions with banks and online commerce platforms. He noted that the same technological advances are also changing the methods used by criminals to conduct financial crimes.
Mazor emphasized that as digital services become more automated and increasingly dependent on AI technologies, financial institutions must adopt more advanced fraud prevention strategies. Rather than relying solely on traditional identity verification methods, banks should focus on analysing behavioural patterns, intent, and trust indicators to strengthen protection against future threats.