The Reserve Bank of India (RBI) in a report released on Monday highlighted that the average cost of data breaches in India reached $2.18 million in 2023, marking a 28% increase since 2020.
However, this is less than the global average cost of data breach.
As per the RBI Currency and Finance report for 2023-24, the average cost of a data breach has also risen to US$ 4.45 million in 2023, a 15% increase over three years.
Globally, the cybercrime costs are expected to reach US$ 13.82 trillion by 2028, up from US$ 8.15 trillion in 2023, the report highlighted.
What are the most common attacks in India?
As per the RBI data, the most common attacks in India are phishing (22%), followed by stolen or compromised credentials (16%).
Recognising the significant costs involved, most central banks have increased their cyber security investment budgets by five per cent since 2020, the report said.
Digital transformation may increase operational risks
The RBI report highlighted that the digitalisation can impact risk taking by banks in both directions.
On the one hand, it can improve the risk diversification capabilities of banks through improvement in operational efficiency, risk management capabilities and better monitoring and screening of debtors.
By providing more data for analysis, digital transformation helps financial institutions better identify, measure, and manage risks in real-time and take timely measures to deal with them, it said.
Reduced reliance on physical interactions with customers decreases the associated operational risks and the likelihood of human errors, it added.
On the other hand, while better and real-time monitoring of risks may foster an environment of relatively low macroeconomic risk, this may result in an increased risk appetite of banks.
Digital transformation may also increase operational risks due to excessive reliance on information and communication technology, financial crime risks (including data breaches), and privacy concerns.
