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.
