Technology Risk in Banking: 10 Cyber Risk Priorities for Resilient Digital Banking

India’s banking sector has changed dramatically over the last decade. Digital payments, mobile banking, APIs, cloud platforms, fintech partnerships and artificial intelligence have made financial services faster and more accessible than ever.

But there is another side to this transformation.

As banking becomes more dependent on technology, a technology failure is no longer just an IT problem. A cyberattack, system outage, failed software update or disruption at a critical technology provider can affect customers, transactions and, in some cases, the wider financial ecosystem.

That was a key message from RBI Deputy Governor Rohit Jain at the SBI Banking and Economic Conclave in Mumbai on September 24, 2026. His address highlighted a shift in thinking: technology is no longer simply an enabler of banking; technology architecture is increasingly part of a bank’s risk architecture.

For banks and financial institutions, the question is therefore no longer simply “Are our systems secure?” It is increasingly: “Are our technology, cybersecurity and resilience capabilities strong enough to keep critical banking services running when something goes wrong?”

Why Technology Risk Has Become a Business Risk

Technology has transformed the way banks operate. Customers expect services to be available around the clock, transactions to happen almost instantly and digital channels to work reliably.

That convenience also creates greater dependency. A bank may have strong capital, liquidity and financial controls, but customers can still be unable to access essential services if a critical application goes down, a cyber incident disrupts operations, or a technology provider becomes unavailable.

This makes technology resilience closely connected to financial resilience. Technology architecture is increasingly becoming part of the organisation’s risk architecture.

Digital Scale Brings Greater Responsibility

India’s digital payments ecosystem illustrates the scale of this transformation.

The source article reports that UPI processed approximately 24.9 billion transactions worth ₹30.15 lakh crore in August 2026. NPCI’s published statistics report 24,508.96 million transactions worth ₹29,82,355.95 crore for the same month.

The growth of UPI, Account Aggregator and the Unified Lending Interface is creating new opportunities, but it also means that disruptions can have consequences beyond a single organisation.

When technology operates at this scale, resilience becomes just as important as performance.

Source: NPCI UPI Product Statistics

Lessons From Previous Incidents

Past incidents have demonstrated why banks need to look beyond their traditional core systems.

The compromise of an ATM switch in the 2018 cyberattack involving an Indian cooperative bank highlighted how vulnerabilities at payment interfaces can be exploited and connected to wider financial systems. The lesson remains relevant: payment switches, APIs, authentication mechanisms, transaction-monitoring systems and other connected components need to be protected as part of a broader security architecture.

The 2024 CrowdStrike incident provides another resilience lesson. It was not a cyberattack; a faulty software update caused widespread disruption across organisations globally. CrowdStrike’s post-incident review identified testing, validation, staged deployment, monitoring and third-party review as areas for improvement.

For banks, this raises an important question: How resilient is the organisation when a critical dependency fails?

External reference: CrowdStrike Preliminary Post Incident Review

The Cybersecurity Perimeter Is Getting Larger

The traditional idea of cybersecurity focused heavily on protecting an organisation’s internal network and external perimeter. That model is no longer sufficient.

Today’s banking environment can include:

• Core banking platforms
• Payment applications and switches
• APIs
• Cloud infrastructure
• Data centres
• Cybersecurity platforms
• Fintech applications
• Software and hardware providers
• Managed service providers
• Third-party technology providers
• AI models and services

These systems are interconnected. A weakness in one component can potentially create consequences elsewhere in the ecosystem.

At the same time, attackers are combining technical vulnerabilities with human behaviour. Compromised credentials, ransomware, social engineering, insider misuse, API vulnerabilities, deepfakes and voice cloning create a threat environment that cannot be addressed through technology controls alone.

AI: Opportunity With Accountability

Artificial intelligence is likely to play an increasingly important role in financial services. Banks can use AI for fraud detection, customer service, risk assessment, threat detection and operational efficiency.

But AI also introduces new risks. Automated systems can influence decisions involving credit, fraud alerts, customer access, pricing and service delivery. If these systems are poorly governed, an error can potentially be amplified at scale.

AI adoption therefore needs appropriate validation, continuous monitoring, human oversight, clear accountability and strong governance.

AI is also changing the threat landscape. Attackers can use it to create more convincing phishing campaigns, impersonate individuals, automate malicious activity and personalise fraud. Financial institutions can also use AI for behavioural analysis, continuous threat detection and automated response.

The challenge is not simply whether banks should use AI. It is how they can use it responsibly while maintaining security, transparency and accountability.

Learn more: AI Governance Framework in India

Related standard: ISO/IEC 42001 AI Management System

Third-Party Risk Cannot Be Outsourced

Modern banks depend heavily on external technology providers. Cloud platforms, fintech companies, software vendors, managed security providers and other technology partners are now an important part of the banking ecosystem.

But outsourcing technology does not mean outsourcing responsibility.

Banks need visibility into critical third-party risks, including access controls, data protection, recoverability, concentration risk, operational resilience and exit strategies.

A provider that appears low risk from the perspective of one institution could become a significant concentration risk if multiple banks depend on the same provider.

Third-party risk therefore needs to be considered as part of the wider technology and resilience strategy.

10 Technology and Cyber Risk Priorities for Banks

1. Make Governance Deliver Results: Technology-risk governance needs to result in measurable improvements, timely decisions and clear accountability.
2. Maintain Visibility Across Technology Systems: Banks need a clear understanding of assets, dependencies, interfaces and exposures. You cannot effectively protect what you cannot see.
3. Address Vulnerabilities and Legacy Technology: Material vulnerabilities should be prioritised and addressed based on severity and potential business impact. Legacy technology also needs particular attention.
4. Strengthen Identity and Access Management: Strong authentication, appropriate privileges and continuous monitoring remain fundamental. Access should be based on business need and reviewed regularly.
5. Verify That Security Controls Actually Work: Implementing a control does not automatically mean the organisation is secure. Banks need to test whether controls operate as intended and deliver expected outcomes.
6. Keep Controls Aligned With Technology: Risk-management processes and security controls need to evolve as new technologies, applications and services are introduced.
7. Manage Third-Party Dependencies: Banks need to understand which providers are critical and what could happen if they experience an outage, cyber incident or other disruption.
8. Learn From Cyber and Technology Incidents: Post-incident reviews should identify underlying causes, control weaknesses and lessons that can reduce future impact.
9. Test Recovery and Resilience Regularly: Recovery plans should not simply exist on paper. Realistic exercises help organisations understand whether critical services can be restored during disruption.
10. Address Architecture and Capacity Weaknesses: Underlying weaknesses in architecture, capacity, system design and dependencies need to be addressed at the root rather than through temporary fixes.

What This Means for Banking Leaders?

The broader message is clear: cybersecurity cannot remain confined to the IT department.

Technology now touches almost every critical banking function. As digital channels, AI, cloud services, APIs and third-party platforms continue to grow, technology risk increasingly becomes a business, operational and governance issue.

For banking leaders, the focus should therefore move beyond compliance checklists towards questions such as:

• Do we know our critical technology dependencies?
• Can we identify vulnerabilities before they become incidents?
• Do our security controls work?
• Can we recover critical services when a major disruption occurs?
• Do we understand the risks created by our third parties?
• Are our AI initiatives being introduced with appropriate governance and accountability?

How ISO/IEC 27001 Supports Banking Cybersecurity

ISO/IEC 27001 can provide banks and financial institutions with a structured information security management approach around risk assessment, governance, controls, monitoring and continual improvement. ISO describes ISO/IEC 27001:2022 as the requirements standard for an Information Security Management System (ISMS).

ISOQAR India: ISO/IEC 27001 Certification and ISO Services

Official reference: ISO/IEC 27001:2022 on ISO.org

How ISO 22301 Supports Digital Banking Resilience

Cybersecurity alone cannot guarantee continuity. Banks also need the ability to prepare for, respond to and recover from disruptive incidents. ISO 22301:2019 provides requirements for a Business Continuity Management System (BCMS), helping organisations establish a structured approach to continuity and recovery.

ISOQAR India: ISO 22301 Business Continuity Management

Official reference: ISO 22301:2019 on ISO.org

Building Resilience Into Digital Banking

Digital transformation has changed what customers expect from financial institutions. Speed, convenience and availability are now fundamental to the banking experience.

But digital growth without resilience can create a very different kind of risk.

As India’s financial ecosystem becomes more connected, banks need to build security and resilience into technology decisions from the beginning, not treat them as activities that happen after implementation.

The future of banking will not be defined only by how quickly institutions adopt new technology. It will also be defined by how well they secure it, govern it and recover when things go wrong.

Digital banking can scale only when security and resilience scale with it.

How ISOQAR India Supports Digital Trust & Security

ISOQAR India’s Digital Trust & Security portfolio includes ISO/IEC 27001 information security management, ISO/IEC 27701 privacy information management, ISO/IEC 42001 AI management systems, cybersecurity assurance and digital risk management. These services can help organisations strengthen information security, responsible AI practices and resilience as technology becomes increasingly central to business operations.

Explore: ISOQAR India Digital Trust & Security Services