Mumbai – Debadatta Chand, MD and CEO of Bank of Baroda, has issued a stark warning regarding the escalating threat of cyber fraud, urging banks to significantly ramp up their cybersecurity investments and improve public financial and digital literacy. Speaking at the Global Fintech Fest in Mumbai, Chand highlighted the growing sophistication of scams, including alarming incidents like 'digital arrests,' which put both banking institutions and their customers at severe risk.
Addressing Dual Vulnerabilities: Bank and Customer
Chand identified two primary areas of vulnerability contributing to the surge in cyber incidents: weaknesses at the bank level and susceptibility among customers. He stressed that while banks face the imperative to fortify their own digital defenses, customer-centric vulnerabilities, often exploited through elaborate social engineering tactics, require a different approach.
"There are two types of frauds that happen. One is vulnerability at the bank level, and the other is vulnerability at the customer level, where people get trapped in digital arrests or other cyber incidents. Customer vulnerability can only be addressed through greater awareness, and there we need to invest heavily in both financial literacy and digital literacy," Chand explained.
Investing in Robust Cybersecurity
Acknowledging the palpable threat, Chand asserted that the danger of cyberattacks is not merely theoretical but a daily reality for financial institutions. "Let's accept the fact that the cyber threat is not on paper, but real. Multiple attacks happen day in and day out, but until it hits you, you don't feel it is real. So, we need to invest more," he emphasized. This call to action comes in the wake of Bank of Baroda itself experiencing a cyber incident in July, where some bank data reportedly appeared on the dark web. The bank responded by engaging an independent cybersecurity agency to conduct a thorough investigation, linking the breach to a potential business email compromise.
Empowering Customers Through Literacy
For customer-level vulnerabilities, the Bank of Baroda CEO underscored the critical role of extensive financial and digital literacy programs. As technology adoption continues its rapid ascent, equipping individuals with the knowledge to identify and resist fraudulent schemes becomes paramount in preventing personal financial losses and safeguarding sensitive data.
Beyond Security: AI and "Phygital" Banking Models
Amidst these security challenges, the banking sector is also embracing technological advancements, particularly Artificial Intelligence (AI). Bank of Baroda is actively leveraging AI for enhanced customer engagement, with multiple use cases under development. This includes AI applications in underwriting processes, product management, and bolstering back-end customer care centers. The bank also features "Aditi," a GenAI-powered virtual relationship manager designed to provide conversational banking services.
Looking ahead, Chand discussed the evolution of physical branch ecosystems in an increasingly digital world. Bank of Baroda has pioneered a "phygital" branch model, integrating digital self-service tools with traditional human assistance. With 30 such branches currently operational, the bank plans to convert more physical locations into this hybrid model, recognizing India's large population requires both digital and in-person banking solutions. As digital penetration grows, so too will the necessity for continued investment in these advanced banking infrastructures.