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Showing posts with label Cyber Security. Show all posts

European Union Agrees to Ban AI Generated Non Consensual Sexualized Deepfakes

 

A temporary deal emerged Thursday between EU lawmakers and national representatives, targeting AI tools that create explicit fake images without consent. Such technology, when applied to produce child exploitation material, will also fall under the new restrictions. Agreement came after extended discussions on digital ethics and public safety concerns. Rules now aim to block deployment of systems designed for these harmful purposes. The move reflects growing attention to misuse of synthetic media across Europe. Final approval processes remain pending among governing bodies. 

Part of wider changes to the EU’s approach on AI, this move fits within the “Omnibus VII” laws meant to streamline digital rule-making. Rules for artificial intelligence across European countries are being aligned through these adjustments, reducing complexity where possible. One goal stands clear - making compliance less fragmented without adding new layers. 

Updates like this reshape how standards apply, slowly shifting the landscape from within. Following talks, officials announced updated guidelines banning artificial intelligence systems from producing private or explicit material about people without their agreement. These measures single out synthetic media depicting minors in sexually abusive scenarios - prompted by rising unease around how machine learning models enable manipulation, harmful behavior, and digital assault. 

Though broad in scope, enforcement hinges on consistent oversight across platforms where such technologies operate. Still, Marilena Raouna noted the deal could ease repeated paperwork demands on firms in the EU's tech industry - so long as safeguards around AI oversight remain intact. Compliance dates shift for high-risk AI under the new version of the framework. Starting December 2, 2027, standalone systems classified as high risk must follow the requirements. 

By August 2, 2028, those integrated into physical products come into scope. The timeline change appears in the current draft deal. Rules apply earlier to independent platforms than built-in ones. Registration of exempted AI tools in the European Union's high-risk database forms part of the deal. Authorities believe tracking these technologies will support clearer monitoring. Oversight gains clarity when deployments become visible through such records. Among updated measures, tighter rules return for handling sensitive personal details via AI aimed at spotting or fixing skewed algorithms. 

Government representatives noted these changes strengthen individual privacy safeguards, yet still require firms to justify extensive data use with concrete need. Now arriving amid global scrutiny, the deal reflects mounting demands on authorities to control tools that craft lifelike false media through artificial intelligence. 

While Europe's officials stress consequences, they point especially at intimate imagery made without permission - citing threats it poses to personal boundaries, digital safety, truth integrity, and public standing. Though not yet legally binding, the agreement advances the EU’s push to shape how artificial intelligence is built and used throughout its countries. Approval must come later, but momentum continues.

Chinese Cyber Threats to Europe Growing Through Silent Espionage Tactics

 

Chinese state-supported hacking groups are becoming one of the most serious cybersecurity concerns for the European Union, with experts cautioning that their activities often go unnoticed due to their discreet nature.

Unlike the highly visible cyberattacks commonly associated with Russia, Chinese-linked operations usually focus on quietly gaining long-term access to systems and collecting intelligence over extended periods.

According to Antonia Hmaidi, a senior analyst at the Mercator Institute for China Studies, one of the major risks involves cyber actors targeting small office devices used across Europe. These include routers, printers, and network equipment that frequently lack strong security protections, making them easier to exploit as entry points into larger systems.

“It’s not like Russian attacks, which are very visible. Therefore, we tend to underestimate it,” Hmaidi said.

Concerns over cyberespionage continue to rise

European authorities have increasingly expressed concerns over cyberespionage activities allegedly linked to China, especially as more incidents involving government agencies and private businesses continue to surface.

Rather than disrupting systems immediately, these cyber campaigns are often aimed at gathering confidential information and monitoring sensitive activity over time.

In response to growing security risks, several European institutions have tightened cybersecurity precautions. Earlier this year, members of the European Parliament travelling to China were reportedly advised to use burner phones and avoid carrying personal electronic devices.

Officials stated that the measures were introduced to minimise the possibility of surveillance or cyber intrusion during overseas visits. Lawmakers and staff members were also provided with security guidance and training before departure.

Similar safety protocols have been adopted by other EU institutions as well. Reports suggest that internal guidelines within the Council of the European Union recommend officials avoid carrying electronic devices to certain countries, including China. If devices must be taken, authorities reportedly advise wiping them completely after returning.

At the same time, staff members of the European Commission travelling abroad have reportedly been issued temporary phones and basic laptops to reduce the risk of espionage.

A stealth-driven cyber strategy

Cybersecurity experts believe Chinese cyber operations differ significantly from more aggressive attacks because they prioritise stealth, persistence, and long-term infiltration.

Instead of causing immediate and visible disruption, attackers quietly enter systems, observe operations, and gradually extract valuable information. This strategy makes detection far more difficult and allows intruders to remain active within networks for long periods without being discovered.

As Europe becomes increasingly dependent on digital infrastructure for governance, business, and communication, analysts warn that failing to recognise these hidden cyber risks could pose serious challenges to the region’s long-term security and technological independence.

Meta Challenges Ofcom Over Online Safety Act Fees and Penalties

 

Challenging new rules, Meta - owner of Facebook and Instagram - is taking Ofcom to the High Court amid disputes about charges tied to the Online Safety Act. The legal move stems from disagreements on how costs and fines are set by the UK's communications watchdog. 

July 2025 marked the start of a legal shift meant to curb damaging material on internet services. Funding oversight duties now fall partly on big tech firms, each paying yearly charges based on global earnings. These payments support Ofcom’s work monitoring digital spaces. Rules took effect without delay once enacted. Revenue ties ensure contributions scale with company size. Later in 2025, new rules took effect targeting firms with annual earnings above £250 million. 

These apply specifically to digital spaces like social networks and search tools - any platform allowing user-generated posts falls under scrutiny. While scale matters, the core focus remains on interactive online environments. Revenue size triggers obligation; activity type defines scope. What stands out is how Meta views the regulator's approach to setting operational charges and potential fines as skewed, placing too much burden on just a few major tech players. Shaped by courtroom arguments, legal representatives emphasized that today’s framework demands disproportionate contributions from firms like theirs. 

Though the Online Safety Act applies across a wide range of online services, the cost structure reflects something narrower in practice. One outcome - seen clearly - is that even minor shifts in methodology could alter financial exposure significantly. Behind these figures lies an assumption: larger platforms must pay more simply because they can. Yet the law itself does not single them out for heavier obligations. 

Instead, what emerges is a system where scale becomes a proxy for liability without clear justification. Disputing the method behind calculating eligible international income forms part of the legal argument. Court documents show Meta arguing penalties ought to reflect earnings only from UK-based operations, not total global turnover. Should firms fail to meet online safety duties, penalty amounts might reach 10% of global turnover - or £18 million - whichever figure exceeds the other. 

Another layer emerges where Meta contests methods used to assign sanctions if several units within one corporate family share fault. Later in London, at an early court session, officials heard that Epic Games - creator of Fortnite - and the Computer and Communications Industry Association might ask to join the legal matter. The possibility emerged through statements presented to the High Court. 

Later this year, more sessions will follow after Mr Justice Chamberlain pointed to matters of broad public significance in the case. Come October, a complete hearing should unfold. Following prior disputes over the Online Safety Act by various groups, litigation has now emerged again. Though distinct, last year’s challenge by the Wikimedia Foundation dealt with related rules on age checks - and ended in defeat. 

Despite pushback, Ofcom stood by its method, saying fees and penalties followed directly from how the law is written. Rather than accept Meta's concerns, the authority insisted the system makes sure firms with major online influence support efforts to keep users safe. Still, Meta insists it will keep working alongside Ofcom, though parts of the rollout feel excessive to them. Even with their suggested adjustments, oversight bodies could still hand down penalties among the highest ever seen on British companies.

Canadian Privacy Regulators Say OpenAI Violated Federal and Provincial Privacy Laws

 

After months of scrutiny, Canadian oversight bodies determined OpenAI did not meet several national and regional data protection standards while developing its AI systems. This outcome emerged from a coordinated review spearheaded by federal Privacy Commissioner Philippe Dufresne, working together with counterparts in Alberta, Quebec, and British Columbia. 

What stood out in the findings was a pattern of data handling at OpenAI - massive volumes of personal details gathered, yet lacking strong protections or clear approval from affected people. Because of this approach, authorities concluded it clashed with rules set by Canada’s privacy law, known formally as PIPEDA, guiding how firms manage private data while conducting commercial activities. 

The way ChatGPT and similar artificial intelligence models were developed raised notable questions for oversight bodies. A key point centered on data collection practices - information about people pulled from open internet resources and external databases, often without clear notice to those affected. Officials pointed out that many users remain unaware their details might feed into machine learning processes. 

Another concern emerged around control: few practical options let individuals inspect, update, or request deletion of their data linked to these systems’ training records or responses. Oversight groups stressed that current safeguards fall short in offering real transparency or user agency. Questions arose about how dependable ChatGPT's answers really are. 

Some pointed out that current methods for managing false or confusing replies fall short - especially if private information is at stake. Even so, Canadian privacy authorities observed OpenAI engaging throughout the probe, committing in advance to adjustments meant to bring operations into line with national data rules. Following these steps, it appears older versions of the AI were phased out due to shortfalls in compliance, while new filters emerged - meant to spot and obscure details like contact numbers or full names across both open-access and legally obtained training collections. 

Some time soon, OpenAI will adjust how it explains the role of user chats in training its systems. A new phase involves more noticeable alerts for people using ChatGPT without logging in. These notices aim to guide visitors away from submitting private details. How exchanges help shape upcoming models will also become part of that message. Updates are meant to surface key points earlier in the experience. 

Further changes include streamlining how users access their data, while offering straightforward steps for disputing AI-generated inaccuracies. Officials emphasized protections for young relatives of well-known individuals - models must now avoid revealing personal details like names or birthdays if the child is not publicly recognized. 

Later scrutiny emerged when news surfaced connecting OpenAI to alarms tied to a violent event in Tumbler Ridge during early 2026, reigniting interest in an inquiry first begun in 2023. Though internal signals about the individual's activity were reportedly noticed earlier, officials claimed the firm failed to forward such red flags to Canadian authorities. Because of what followed, oversight bodies emphasized better coordination among artificial intelligence developers, police units, and public health offices whenever physical harm appears likely. 

Rather than wait, expectations now lean toward faster information sharing across these groups. Pressure mounts globally as scrutiny increases on firms using artificial intelligence, pushing them toward stronger safeguards for personal data. How information is gathered and applied in training powerful models now faces closer examination. 

Greater openness about methods has become harder to avoid. Responsibility for outcomes ties directly to practices behind massive data processing. Standards shift under persistent demands for clearer conduct.

High Court Squashes Ban for Sim-Swap Fraud, Says Zero Customer Liability


In an important ruling amid surging digital financial fraud attacks, the Bombay HC sided with the customer protection norms. It directed Bank of Baroda to return Rs. 1.24 crore to the victim private firm that lost money in a SIM-swap case. The court stressed that if a consumer reports fraud promptly in time, “zero liability” is ruled, and the bank must reimburse the losses.                 

Private company reported the incident immediately

The order was given by a division bench of the HC, which included Justices Manjusha Deshpande and Bharati Dangre, when private company PNP Polytex (based in Mumbai) submitted a petition. Polytex alleged that Rs.1.24 crore had been stolen from its bank accounts illegally and without knowledge. 

About court proceedings

As per the submissions to the court, the firm informed the bank soon after finding malicious transactions and asked the accounts to be frozen. The bank could only save Rs. 47.8 lakh, the remaining money was already stolen by the hackers. After this, the firm moved to HC for help.

Later, enquiry revealed that the scam was done using a SIM-swap tactic, where hackers get control of the target’s registered contact number. This lets the hackers intercept OTPs and do banking transactions without the account owner's consent and knowledge. The high court found that the scam was done by third-parties, and showed no evidence of negligence on consumer’s end.

What is RBI’s zero liability rule?

During the proceedings, the court referred to the July 6, 2017 statement given by the RBI, which laid down the customer protection guidelines in incidents of illegal electronic banking transactions. According to the circular, the consumers are entitled to zero liability if they report fraud transactions within 72 hours (three days).

In the judgement, the high court stressed that if a customer informs the bank about a scam or fraud, it is the duty of the bank to return the disputed amount back to the victim’s account. The court also said that the burden of proving customer negligence is on the bank too.  

The court rejected the bank's defenses that it had followed the due process and security measures, and the bench  labelled the argument as a “lame excuse,” saying that such mechanisms become powerless when a SIM card is hacked. The court also attributed another ruling in an incident where HDFC bank was held liable under similar situations. 

Bank will return stolen amount with interest

After revising the previously frozen funds, the High Court ordered the bank to return the remaining sum plus 6% interest within eight weeks. 

Critical OpenClaw Flaws Allow Persistent Access and Credential Abuse


 

OpenClaw, a self-hosted AI agent runtime which has gained rapid adoption by enterprises, introduces a new type of security exposure for enterprises as dynamically executed content, external skill integrations, and cloud-based authentication mechanisms are convergent without adequate defensive control mechanisms.

The OpenClaw platform is unlike conventional applications that are constructed using fixed execution logic, as it is capable of accepting untrusted inputs, retrieving and executing third-party code modules, and interacting with connected environments with assigned credentials, effectively extending the trust boundary far beyond the application layer itself. These architectural flexibility and the recently disclosed ClawJacked exploitation technique expose critical weaknesses in authentication handling and token protection within browser-based cloud development environments, according to security researchers. 

It has been demonstrated that malicious web content can exploit active developer sessions to extract sensitive access tokens, thereby granting attackers unauthorized access to source repositories, cloud infrastructures, and privileged enterprise resources. Increasingly, organizations are integrating cloud-native development platforms into their engineering workflows. This disclosure highlights concerns regarding privilege scoping, identity isolation, and other security aspects associated with autonomous AI-powered runtime environments.

A coordinated vulnerability chain, collectively known as the "Claw Chain," was identified by Cyera researchers in response to these concerns, demonstrating how multiple vulnerabilities within OpenClaw can be combined to compromise a system, gain unauthorized access to data, and escalate privileges across affected systems. 

In particular, two vulnerabilities have been assigned CVE-2026-44113 and CVE-2026-2026-44112, which contain time-of-check/time-of-use (TOCTOU) race conditions within the OpenShell managed sandbox backend, which could allow attackers to circumvent sandbox enforcement and interact with files outside of the mounted root. 

In contrast to the first issue, which permits arbitrary write operations which can lead to configuration changes, backdoor installations, and long-term control over compromised hosts, the second issue provides a pathway for unauthorized disclosure of system artifacts, credentials, and sensitive internal data through unauthorized file disclosure. 

Researchers also disclosed CVE-2026-44115, a vulnerability resulting from an incomplete denylist implementation that allows adversaries to conceal shell expansion tokens in heredoc payloads and execute commands that bypass runtime restrictions. 

A fourth vulnerability known as CVE-2026-44118 introduces an improper access control condition in which non-owner loopback clients can impersonate privileged users to manipulate gateway configurations, alter scheduled cron operations, and gain greater control of execution environments through unauthorized use of privileged accounts. These flaws collectively demonstrate the possibility of insufficient isolation, weak privilege boundaries, and inadequate runtime validation mechanisms within modern AI agent infrastructures resulting in a full compromise chain which can sustain stealthy and persistent access despite seemingly isolated weaknesses.

OpenClaw's rapid adoption and permissive architecture have contributed to its rapid transformation from a niche automation framework into a widely deployed AI-driven orchestration environment, further amplifying its security implications.

In late 2025, Austrian engineer Peter Steinberger released a public version of the project that gained wide traction because of its unique capability to provide custom automation capabilities outside of tightly controlled commercial ecosystems. The OpenClaw assistant does not rely on vendor-defined integrations, but rather allows users to develop, modify, and distribute executable "skills."

The result is a large repository containing thousands of automation scenarios developed by the community without centrally managing, categorizing, or validating their security. Due to its “self-hackability” design, where configurations, memory stores, and executable logic are maintained using local Markdown-based structures that can be modified by the user, it has attracted both developer interest and growing scrutiny from security researchers concerned about the absence of hardened trust boundaries. 

It was discovered that hundreds of OpenClaw administrative interfaces were accessible over the internet and did not require authentication. These concerns escalated. Investigations revealed that improperly configured reverse proxies could forward external traffic through localhost-trusted channels, causing the platform to mistakenly treat remote requests as privileged local connections. 

Security researcher Jamieson O'Reilly demonstrated the severity of the issue by gaining access to sensitive assets such as credentials for Anthropic APIs, Telegram bot tokens, Slack environments, and archived conversations. Further research revealed that prompt injection attacks could be used to manipulate the agent to perform unintended behavior by embedding malicious instructions in emails, files, or web content processed by the underlying large language model. 

One such scenario was demonstrated by Matvey Kukuy's delivery of crafted email payloads which coerced the bot to provide private cryptographic keys from the host environment upon receiving instructions to review inbox contents. Several independent experiments have demonstrated the system discloses confidential email data, exposes the contents of home directories via automated shell commands, and searches local storage automatically after receiving psychologically manipulative prompts. 

In aggregate, these incidents illustrate an industry concern that autonomous AI agents operating with wide filesystem visibility, persistent memory, and delegated execution privileges may be highly susceptible to indirect command manipulation when deployed in a manner that does not adhere to strict authentication controls, runtime isolation, and contextual validation controls.

Despite the fact that there is no publicly verified link to any known advanced persistent threat group linking the exploitation of the OpenClaw vulnerabilities, security analysts note that the operational characteristics of the attack are in line with tradecraft commonly utilized in credential theft, browser hijacking, and adversary-in-the-middle intrusion campaigns.

MITRE ATT&CK framework techniques, including T1185 related to browser session hijacking as well as T1557 related to man-in-the-middle attacks, have been identified as parallel techniques, and both of these techniques are frequently used in targeted attacks against enterprise authentication systems and cloud-based environments. There has been a growing concern that financially motivated threat actors and state-aligned operators may incorporate the technique into broader intrusion toolsets due to the availability of publicly available proof-of-concept exploit methods and the relatively low complexity required to weaponize these flaws. 

It was discovered that all versions of OpenClaw and Clawdbot before version 2026.2.2, including all builds up to version 2026.2.1, have been vulnerable to the vulnerability. Researchers stated that in the updated version, unauthorized WebSocket interactions are restricted and authentication checks are enforced on the exposed /cdp interface, which previously permitted unsafe assumptions regarding local trust. 

During the deployment of immediate patches, security teams are advised to monitor for suspicious localhost WebSocket activity, unauthorized browser extension behaviors, and attempts to communicate outbound via ws://127.0.0.1:17892/cdp or infrastructure controlled by known attackers. 

When rapid patching is an operational challenge, experts recommend that the OpenClaw browser extension be temporarily disabled, that host-level firewall restrictions be enforced around local WebSocket services, and that browser session telemetry and endpoint indicators of compromise be continuously reviewed to determine if there has been an unauthorized persistence of credentials or credential interception. 

OpenClaw's vulnerability chain is a reflection of an overall security reckoning taking place in the rapidly expanding AI agent ecosystem, in which convenience-driven automation is outpacing the maturation of defensive safeguards designed to contain it in a rapidly expanding ecosystem. There is an increasing tendency for autonomous assistants to gain access to developer environments, authentication tokens, local storage, messaging platforms, and cloud infrastructure, so that the traditional boundaries between trusted execution and untrusted input are being eroded. 

Platforms with the ability to self-modify, delegate command execution, and persist contextual memory present significant security risks that are fundamentally different from conventional software, particularly when deployed with excessive privileges and inadequate isolation during runtime. 

Despite the fact that OpenClaw's vulnerabilities may be mitigated by patching, access restrictions, and stronger authentication enforcement, the incident emphasizes the larger industry concern that artificial intelligence-driven operational tools may become a high value target for both cybercriminals and advanced intrusion groups in the very near future. 

These findings serve as a reminder that, as organizations adopt autonomous AI systems, security architecture, privilege segmentation, and continuous monitoring must no longer be overlooked.

Cybersecurity Can No Longer Be Left to IT Teams Alone, Experts Warn

 



As cyber attacks continue to grow in frequency and complexity, organizations are facing increasing pressure to rethink who should be responsible for protecting their systems, operations, and sensitive data. Security experts say cybersecurity is no longer simply an IT issue. Instead, it has become a business-wide responsibility that requires involvement from leadership teams, employees, and external security partners alike.

The discussion comes at a time when cyber threats are affecting organizations at an alarming scale. According to the UK Government’s Cyber Security Breaches Survey 2025/2026, 43% of businesses and 28% of charities reported experiencing cybersecurity breaches or attacks during the past year. The numbers were considerably higher among medium-sized businesses, where 65% faced incidents, and large enterprises, where the figure rose to 69%. High-income charities were also heavily targeted, with 34% reporting attacks.

Phishing continued to dominate as the most common threat. The survey found that 93% of affected businesses and 95% of impacted charities encountered phishing-related attacks. These scams often involve deceptive emails, fake websites, fraudulent login portals, or impersonation attempts designed to steal credentials and sensitive information. Other cyber threats, including malware infections and digital impersonation schemes, also remain a persistent concern for organizations.

The financial damage linked to cybercrime is equally significant. Research associated with cybersecurity company ESET estimated that cyber attacks cost UK businesses nearly £64 billion annually, highlighting the growing economic impact of digital threats.

With risks continuing to escalate, many organizations are reassessing who should oversee cybersecurity strategy and decision-making. Experts say there is no universal model, as responsibility often depends on a company’s size, structure, industry requirements, and risk exposure.

In smaller businesses, cybersecurity duties are frequently managed by IT managers or internal technology teams. However, industry specialists warn that relying solely on technical departments may create gaps between security planning and broader business objectives. As organizations expand, many experts believe cybersecurity leadership should move closer to executive management.

Durgan Cooper, director at CETSAT, emphasized that cybersecurity accountability should ultimately rest with senior leadership or board-level executives. According to Cooper, effective protection requires coordination between technical teams, company leadership, and third-party partners while ensuring that security priorities align with organizational goals.

Within larger enterprises, cybersecurity responsibilities are commonly led by Chief Information Security Officers, often working alongside Chief Information Officers and other senior executives. Spencer Summons, founder of Opliciti, stated that organizations need cybersecurity leaders capable of understanding evolving threats, communicating risks clearly to boards, and integrating security into long-term business planning. He also noted that sectors such as healthcare and finance face additional regulatory pressure that makes executive oversight even more important.

Cybersecurity professionals increasingly stress that protecting organizations cannot remain the responsibility of a single department. Matthew Riley, European Head of Information Security at Sharp Europe, recommended that businesses establish clear governance frameworks defining who is responsible for different security tasks. Many companies now rely on systems such as RACI matrices, which identify who is responsible, accountable, consulted, and informed during cybersecurity operations and incident response.

Experts caution that assigning cybersecurity entirely to IT departments may leave important business risks overlooked. At the same time, distributing responsibility too broadly can weaken accountability and slow decision-making during critical incidents. Instead, many specialists advocate a shared-responsibility culture where cybersecurity awareness is integrated across the entire organization.

The growing intensity of cyber attacks has also increased pressure on cybersecurity professionals themselves. Security teams are now managing ransomware campaigns, phishing attacks, supply chain compromises, and AI-assisted threats at an unprecedented pace, often with limited staffing and resources. Experts say spreading cybersecurity awareness and responsibilities throughout the organization can help reduce burnout while improving overall resilience.

Thom Langford, EMEA Chief Technology Officer at Rapid7, argued that cybersecurity must become part of every business function rather than remaining isolated within security teams. According to Langford, organizations are more resilient when employees across all levels actively participate in protecting systems and identifying suspicious activity.

Industry leaders also believe executive involvement plays a decisive role in cybersecurity effectiveness. Specialists from Qualys noted that Chief Information Security Officers should ideally report directly to CEOs or boards rather than operating solely under IT leadership. This structure helps organizations approach cybersecurity as a broader business risk issue instead of treating it purely as a technical challenge.

Alongside internal leadership, many businesses are increasingly turning to external cybersecurity providers for additional expertise and support. Outsourcing security operations can help companies address skill shortages and resource limitations, but experts warn that organizations must still maintain strategic oversight. Businesses are advised to conduct thorough vendor assessments, establish strong service-level agreements, and continuously monitor external providers to reduce operational risks.

Security specialists say outsourcing works most effectively when external consultants collaborate closely with internal teams instead of replacing them entirely. Maintaining internal visibility and control remains critical for ensuring cybersecurity strategies stay aligned with company objectives.

As cyber threats continue growing, experts increasingly agree that cybersecurity ownership cannot rest with one person alone. Effective security strategies require executive accountability, technical expertise, employee participation, and continuous collaboration across departments and external partners. Organizations that treat cybersecurity as a company-wide responsibility rather than a siloed IT function are likely to be better prepared for the growing challenges of the modern digital threat environment.

Indian Banks Step Up IT Spending Over AI Security Fears

 

Public sector banks are preparing to spend more on technology because a new wave of AI-driven cyber risk is making their existing systems look vulnerable. The main concern is Anthropic’s Claude Mythos, which has raised alarms for its ability to identify software weaknesses and potentially help attackers exploit them. 

Indian banks are being pushed to treat IT spending as a survival need, not just an operating cost. Senior bank executives have said they will raise budgets this financial year, with a large share going into cybersecurity, stronger defenses, and monitoring tools to reduce exposure to attacks. 

The issue is especially serious because banks depend on legacy systems that run critical operations in real time. One successful breach can ripple across payments, forex, clearing, depositories, and other linked financial networks, making the whole sector more exposed than a single institution might appear on its own.

The concern grew after Anthropic’s tests suggested Mythos could perform advanced cybersecurity and hacking-related tasks at a level that outpaced humans in some cases. Reports also noted that the model found thousands of high-severity vulnerabilities, which made regulators and bank leaders worry that similar tools could shorten the time between discovering a flaw and weaponizing it. 

In response, the government formed a panel under SBI Chairman C S Setty to study the risks and recommend safeguards. Finance Minister Nirmala Sitharaman has also urged banks to take pre-emptive measures, while institutions are expected to coordinate in the coming weeks to identify weak points and decide where additional investment is needed.