India's Digital Payment Revolution: Why Security Must Evolve Now, ETCISO

Time of India

6 days ago

India's digital payments ecosystem has scaled rapidly, powered by the twin forces of agile fintechs and resilient banking rails. During 2024-25, total digital payments recorded growth of 34.8% and 17.9 % in volume and value terms, respectively. The Reserve Bank of India's introduction of the e-rupee and integration by platforms like Google Pay, AmazonPay, and PhonePe reflect a shift where digital transactions are now central to India's financial system. This scale brings rising expectations for performance, security, and uninterrupted availability.
Additionally, operational risks are increasing. A five-hour UPI disruption in April 2025 caused ripple effects across consumers, businesses, and institutions. Consumer expectations have evolved to requiring 24x7 availability and uncompromised security. Yet incidents of frauds are rising sharply. According to the Ministry of Finance, an 85% rise in domestic UPI fraud was reported in fiscal year 23-24, with losses surpassing INR 1,000 crore. Cyber frauds are no longer limited to stolen credentials or phishing attempts. Threat actors are exploiting third-party APIs, automating attacks, and deploying synthetic identities. As instant payments and cloud-driven platforms grow, so does the complexity of securing them.
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India's payment infrastructure must now evolve to absorb disruption, ensure continuity, and protect trust. This requires embedding cyber resilience across every layer of the ecosystem, including architecture, applications, and transactions. Resilience must be built for continuity under pressure and not just to avoid risk. It involves anticipating disruptions, enabling real-time response, and sustaining secure operations. Banks, fintechs, and regulators must align on a security-first strategy to maintain confidence and support long-term digital growth.Maintaining uptime and steady availability has become a critical factor for building trust in India's digital finance systems with even brief disruptions affecting user confidence and business continuity. Consumers view the ecosystem as a single entity, without differentiating between a payment app, a bank server, or a cloud provider. As financial institutions tend to be at the forefront here, they need to ensure that resilience must be built across the entire technology stack to deliver consistent performance, high uptime, and uninterrupted service across all transaction volumes and locations.Building a resilient infrastructure requires a design approach that anticipates failure and ensures uninterrupted performance. This involves deploying workloads across multi-cloud environments to eliminate single points of failure and establishing automated failover mechanisms with geo-redundancy that helps in shifting operations seamlessly during disruptions. Additionally, real-time monitoring, supported by AIOps tools, plays a critical role in detecting anomalies early and triggering swift, automated responses to maintain continuity. Together, these capabilities create a robust foundation for operational resilience and long-term trust in digital systems.While resilient infrastructure ensures uptime, it must be complemented by an intelligent and adaptive threat detection system. Cyber threats are advancing at machine speed, outpacing traditional rule-based defenses. AI now plays a central role in cyber resilience, enabling real-time analysis, anomaly detection, and predictive response.Its ability to learn from live patterns and process vast volumes of transactional data brings precision and speed to security operations. GenAI extends this capability by uncovering early indicators of compromise through historical log analysis, enabling preventive action before breaches occur.This dual-use nature of AI, as both a defense tool and a potential threat, makes governance critical. A responsible AI strategy must include zero-trust frameworks, least-privilege access, and clear accountability to ensure secure deployment while preserving stakeholder trust.Thus, AI's true value lies in how seamlessly it integrates into existing workflows. Embedded into a broader resilience strategy, it sharpens detection, accelerates decision-making, and enables real-time mitigation, reinforcing control, compliance, and long-term digital trust.India's digital payments growth trajectory remains strong, but its long-term success will depend less on transaction speed and more on the ability to secure, sustain, and scale operations with confidence. The financial ecosystem must embed cyber resilience as a design principle, not an afterthought. This requires coordinated action across banks, fintechs, regulators, and technology providers.India is well positioned to lead the next phase of global payments innovation. The digital foundation is in place. The priority now is to build resilience in India's digital payment architecture and elevate security from a compliance requirement to a strategic enabler of growth, while leverage AI for driving faster, smarter cyber decisions—boosting availability, resilience, security operations, continuous control monitoring, and data security posture management.
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ETCISO
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