Mumbai
Tuhin Kanta Pandey has identified artificial intelligence-driven cybersecurity threats as one of the biggest risks facing India’s financial markets, warning that vulnerabilities in software systems could seriously undermine market integrity.
Pandey said current concerns regarding artificial intelligence are focused more on cybersecurity risks than on fears of market manipulation or algorithmic trading disruptions.
He explained that modern financial markets rely extensively on software infrastructure, making them highly vulnerable to cyberattacks if weaknesses in those systems are not addressed quickly.
According to the SEBI chief, any successful cyberattack targeting financial market systems could have severe consequences for investor confidence, operational stability and the overall integrity of the market ecosystem.
He emphasized that regulators and market participants must take preventive measures to strengthen digital security frameworks before vulnerabilities can be exploited.
Pandey stressed that all software systems used in the financial sector, including those developed by third-party vendors, must undergo strong security checks and regular updates.
He said aggressive patch management practices and extensive vulnerability assessments are necessary to ensure that weaknesses in software systems are identified and resolved immediately.
The SEBI chairman also highlighted the importance of conventional cybersecurity tools in detecting and preventing attacks, even as artificial intelligence technologies become increasingly sophisticated. He said market institutions should adopt a proactive approach toward cybersecurity rather than reacting only after incidents occur.
His comments come at a time when governments, regulators and technology experts worldwide are expressing growing concern about the rapid advancement of AI systems capable of identifying and exploiting software vulnerabilities autonomously. Experts warn that increasingly advanced AI models could significantly raise the scale and speed of cyberattacks against financial institutions and critical infrastructure.