AI-driven cybersecurity threats biggest risk to market integrity: SEBI chief

MUMBAI: Securities and Exchange Board of India chairman Tuhin Kanta Pandey has described artificial intelligence-driven cybersecurity threats as one of the most significant risks facing India’s financial markets, calling for aggressive measures to strengthen the protection of software systems used across the market ecosystem.

Speaking during an interaction with NDTV Profit, the chairman said concerns around AI tools are currently centred more on cybersecurity vulnerabilities than on risks related to market manipulation or algorithmic trading.

Pandey said financial markets are heavily dependent on software systems and any weakness in cybersecurity infrastructure can seriously threaten market integrity if exploited successfully.

“Most of the recent concerns around AI tools are related to cybersecurity. As you know, markets rely heavily on software systems, and if cybersecurity is threatened or vulnerabilities are found in the software, there is a risk of attacks. If such attacks are successful, they can pose a serious threat to market integrity,” he said.

He stressed the need for proactive safeguards across all software deployed in the financial markets, including systems provided by third-party vendors.