India's fintech boom faces rising cyber threats, says PwC–UFF report

With 10,200 FinTech companies operating in the country, India has become a global hub for digital payments, lending, neobanking and blockchain innovation, according to a report by PwC India, with fintech industry association Unified Fintech Forum (UFF) said. However, as FinTech adoption accelerates—driven by over 650 million smartphone users and government-backed digital initiatives—cybersecurity has become the foundation for sustainable growth, the report titled 'FinSec: An Emerging Equation Between FinTech and Cybersecurity' says.

It states that while emerging technologies in the FinTech space are catalysing innovation and growth, they are also giving rise to new cybersecurity threats and challenges. Additionally, tighter budgets have weakened defences. Global FinTech funding fell to $39.22 billion in 2023, forcing many firms to cut cybersecurity spending. A global shortage of skilled IT professionals has slowed the deployment of protective systems, leaving gaps that criminals are exploiting. Heavy dependence on third-party service providers and the race to roll out new products have further amplified the risks.

Granular focus on cybersecurity is needed:

Jatinder Handoo, CEO, Unified Fintech Forum, said as India cements its place as a global FinTech leader, cybersecurity is no longer a choice; it is the foundation for sustainable growth. "FinTech and cybersecurity are inextricably linked, and protecting customer trust must remain non-negotiable. This report is a timely reminder that collaboration between industry, regulators, and innovators is critical to secure the future of digital finance."

India’s FinTech revolution is powered by innovation and digital inclusion—but its future depends on cybersecurity, says Sundareshwar Krishnamurthy, Partner and India Cyber Leader at PwC India. "Trust, resilience, and growth demand that robust security stands at the core of every breakthrough. Only by embedding cybersecurity and collaboration at every step can we ensure that India’s financial transformation remains secure, inclusive, and globally influential."

Shah Amber, MD at PwC India, said that as the FinTech sector in India is expected to grow rapidly ($400 billion by 2030), a robust cybersecurity posture will enhance business protection and help build a reputation that customers and stakeholders can confidently rely on. "In this fast-evolving landscape, safeguarding customer data and building digital trust are not just priorities; they are essential for driving innovation and resilience across the financial ecosystem."

Recommendations to reduce cyber threats:

In its recommendations, the report asks the ecosystem players to build zero zero-trust architecture, including continuous authentication, micro-segmentation and real-time monitoring; adopt cloud-native security solutions with full visibility and scalability; use AI and ML to detect threats at an early stage; develop quantum-resistant cryptography to prepare for next-generation risks; and strengthen regulatory technology (RegTech) integration to improve compliance and oversight.