The SEBI cybersecurity framework is pivotal in safeguarding India’s financial systems amidst rising cyber threats. In 2024, industries managing vast personal and financial data faced heightened attacks, with India’s financial sector ranking as the third most targeted. The rapid growth of digital trading, payments, and financial services has further expanded the volume of sensitive data processed, increasing vulnerabilities to breaches. Furthermore, the reliance on cloud services, mobile applications, and digital infrastructure has fueled a surge in financial fraud and cyberattacks.

This is where SEBI’s initiative addresses these escalating risks by introducing a robust cybersecurity framework to fortify critical financial systems. However, regulatory measures alone are insufficient. Capital market organizations must adopt a proactive and preventive security strategy. Strengthening cyber resilience and implementing measures that increase the cost and complexity of attacks are essential to deter adversaries. This integrated approach is crucial to protect sensitive data and maintain trust in India’s financial ecosystem.

Furthermore, SEBI’s cybersecurity framework aligns closely with the NIST Cybersecurity Framework, which encompasses important functions like identify, detect, protect, respond, recover, and governance. However, it offers a broader scope by emphasizing enhanced vulnerability assessments for new software developments and robust accountability mechanisms. And unlike many international frameworks, SEBI mandates financial organizations to integrate cybersecurity strategies with overall business risk management. Adding  to this, it underscores the critical role of top leadership in providing effective oversight. This comprehensive approach positions SEBI’s framework as a forward-thinking model, tailored to address the evolving cybersecurity landscape while fostering resilience and accountability in India’s financial sector.

Mitigating Risks in a Digitized Financial Landscape

Today, regulated entities adopting a reactive cybersecurity approach face significant risks, as this strategy leaves them ill-equipped to detect threats early. Threat actors exploiting cloud vulnerabilities can cause data breaches that destabilize markets and undermine investor confidence. Reactive measures prioritize incident response and damage control, resulting in constant firefighting rather than proactive prevention. This inevitability of attacks leads to operational disruptions, financial losses, and a diminished reputation.

With India’s increasing reliance on digital trading and financial services, regulated entities must pivot to a preventive strategy, emphasizing exposure management and cyber resilience. By proactively addressing vulnerabilities, organizations can mitigate risks before they materialize, ensuring stability and maintaining stakeholder trust. This forward-looking approach is essential to safeguard critical financial systems in an evolving threat landscape.

Furthermore, the rapid adoption of cloud services by regulated entities has introduced a range of overlooked cyber risks, forming the "Toxic Cloud Trilogy": critically vulnerable, overly privileged, and publicly exposed cloud assets. In the race toward cloud migration, many organizations neglect robust security measures, exposing themselves to potential breaches.

Fostering Complete Transparency

In multi-cloud and hybrid environments, achieving full visibility into cloud assets is a significant challenge. Traditional security tools often fail to adapt to the cloud's dynamic nature, leaving critical vulnerabilities undetected. Without comprehensive monitoring of cloud infrastructure, regulated entities struggle to identify and mitigate risks, putting sensitive financial data at jeopardy.

Hybrid cloud setups also introduce reliance on third-party vendors, such as cloud service providers and SaaS platforms. Organizations frequently lack insight into these vendors' security practices, creating a blind spot where an unaddressed vulnerability in a third-party system can become an entry point for attackers.

To address these challenges, regulated entities must prioritize continuous assessment and proactive risk management across their cloud ecosystems. So, by enhancing visibility, securing privileged access, and demanding greater accountability from third-party vendors, organizations can safeguard their critical assets and maintain trust in an increasingly digitized financial landscape.

Building a Robust Exposure Management Program

Stock exchanges, portfolio management organizations, and other regulated entities can protect against rising cyber threats by adopting a robust exposure management program. This proactive approach helps identify vulnerabilities, prioritize remediation, and streamline security operations across the entire attack surface, including IT infrastructure, cloud environments, and critical systems.

Exposure management breaks down security silos, uncovering interconnected risks and ensuring high-priority exposures are addressed before they escalate. By providing unified visibility and actionable insights, it enables organizations to isolate and mitigate high-risk cyber exposures effectively. This preventive strategy reduces the likelihood of large-scale attacks, strengthens resilience, and safeguards sensitive financial systems.

About the Author

Rajnish Gupta, Managing Director & Country Manager, Tenable India who brings over 30 years of IT and cybersecurity experience driving momentum for enterprises, Rajnish Gupta joined Tenable from Palo Alto Networks, where he was the India Country Director for the Cortex division. Prior to that, he was a Senior Director and Cyber Security Leader at Microsoft.