India’s fintech revolution just hit a dangerous inflection point. The sector, celebrated for rapid growth in digital payments, lending, and blockchain innovation, now faces mounting cybersecurity threats that could derail its extraordinary trajectory. A new PwC India and Unified Fintech Forum report released in October 2025 warns that despite being a global fintech hub with over 10,200 companies and more than 650 million smartphone users, India’s ecosystem grapples with vulnerabilities exposed by escalating cyberattacks.
The timing proves particularly concerning—global fintech funding plummeted to USD 39.2 billion in 2023, forcing firms to cut cybersecurity budgets even as sophisticated cyber threats intensify. This report, titled “FinSec: An Emerging Equation Between FinTech and Cybersecurity,” identifies critical risks and recommends urgent collaborative actions to safeguard India’s transformative digital financial journey before catastrophic breaches undermine the trust that underpins the entire ecosystem.
Explosive Growth Creates Expanding Attack Surfaces
India’s fintech boom—fuelled by government initiatives and thriving digital adoption—has revolutionised financial inclusion and innovation, bringing banking services to hundreds of millions previously excluded from formal financial systems through mobile-first platforms and simplified user experiences. However, this growth has also dramatically expanded attack surfaces for cybercriminals looking to exploit system weaknesses in rapidly deployed technologies, where security considerations sometimes took a backseat to speed-to-market imperatives driven by competitive pressures. The report highlights concerns around over-reliance on third-party vendors providing critical services without adequate security oversight, lack of skilled cybersecurity professionals capable of defending against sophisticated attacks, and rushes to launch new products while compromising security controls.
Global fintech funding plummeted to USD 39.2 billion in 2023, forcing firms to cut cybersecurity budgets even as sophisticated cyber threats intensify through state-sponsored actors, organised criminal syndicates, and opportunistic hackers targeting financial data and transaction systems. India’s financial sector has recorded sharp increases in cyber incidents, with malware injections into software supply chains becoming significant concerns—trusted vendor updates delivering malicious payloads bypassing traditional perimeter defenses that assume internal systems remain trustworthy. These factors combine to expose fintech companies to risks ranging from data breaches compromising customer information to service disruptions preventing transactions—threatening customer trust and business continuity whilst potentially triggering regulatory penalties and reputational damage. Supply chain attacks, where malware infiltrates through software updates or vendor systems, now account for nearly 60% of cybersecurity incidents targeting Indian fintech, representing fundamental vulnerabilities in interconnected ecosystems where individual company security proves only as strong as the weakest links.
Multi-Layered Defence Strategies Required
The PwC-UFF report recommends multi-layered, collaborative approaches to address emerging cybersecurity threats—moving beyond traditional perimeter defenses toward comprehensive security architectures recognising that breaches prove inevitable and containment strategies become equally important as prevention. Central to this involves adopting Zero Trust Architecture models involving continuous authentication—verifying user identities throughout sessions rather than assuming initial login suffices—real-time monitoring detecting anomalous behaviours suggesting compromised accounts, and micro-segmentation limiting lateral threat movement within networks. Cloud-native security solutions offering end-to-end visibility and scalability prove vital for adapting to dynamic fintech environments where infrastructure constantly evolves through continuous deployment practices, updating applications multiple times daily rather than quarterly release cycles.
Furthermore, leveraging artificial intelligence and machine learning drives early threat detection and predictive threat intelligence, enabling proactive defenses against evolving attack vectors through pattern recognition—identifying emerging threats before widespread exploitation occurs across multiple victims. Preparing for quantum computing threats by developing quantum-resistant cryptography proves critical for future-proofing fintech security, recognising that current encryption standards securing transactions and data storage will become vulnerable once quantum computers achieve sufficient power—breaking classical cryptographic algorithms. Regulatory technology integration is urged to improve regulatory oversight, compliance automation reducing manual processes prone to errors and delays, and risk management through standardised frameworks enabling consistent evaluation across organisations and jurisdictions. As Jatinder Handoo, CEO of UFF, states: “FinTech and cybersecurity are inextricably linked, and protecting customer trust must remain non-negotiable”—as breaches undermine confidence that takes years to build but moments to destroy through publicized incidents.
Talent Shortages Compound Systematic Vulnerabilities
A notable challenge undermining India’s cybersecurity readiness involves severe shortages of skilled IT security professionals capable of defending against sophisticated attacks employing advanced techniques beyond basic phishing or malware that entry-level security staff can address. Heavy dependence on third-party service providers for critical functions—including payment processing, data storage, and customer authentication—creates vulnerabilities where vendor compromises cascade across multiple fintech companies sharing common infrastructure or services without adequate isolation. The report emphasises that by 2025, over 45% of organisations globally will face compromises via their supply chains—a trend amplified in India’s interconnected fintech ecosystem, where vendors serve numerous companies simultaneously, making them attractive targets for attackers seeking widespread impact.
The necessity to rapidly release new fintech products and features pressures security teams conducting reviews and testing—potentially leading to gaps cybercriminals eagerly exploit through zero-day vulnerabilities in hastily deployed code lacking thorough security audits. Bridging talent gaps and enhancing contractual safeguards with vendors are urgent steps toward mitigating systemic risks—through workforce development programmes, competitive compensation attracting skilled professionals, and stringent vendor management ensuring third-party security matches internal standards. Sundareshwar Krishnamurthy, Partner and India Cyber Leader at PwC India, warns: “India’s fintech revolution depends on embedding cybersecurity and collaboration at every step to ensure secure and inclusive financial transformation”—rather than treating security as an afterthought addressed following breaches.
Collaborative Governance Framework Essential
Tackling India’s rising fintech cyber threats requires concerted efforts amongst industry players, regulators, and technology innovators—moving beyond individual company defenses toward ecosystem-wide resilience, recognising that interconnected systems mean individual vulnerabilities affect collective security. The report calls for creating cyber threat intelligence sharing frameworks—enabling real-time information exchange about emerging threats, attack patterns, and defensive measures without competitive concerns preventing collaboration that benefits all participants through improved collective security. Regular security audits and raising cybersecurity awareness across all fintech stakeholders—including developers, operations staff, and management—ensure security considerations inform decision-making at all organisational levels, rather than remaining isolated within security departments lacking influence.
Strengthening enforcement of data privacy and security standards under guidelines like RBI’s cybersecurity framework and the Personal Data Protection Bill proves essential to building digital trust through consistent standards applied across organisations, regardless of size or business model. Collaboration enables rapid incident response and resilience practices—reducing systemic impacts of attacks through coordinated containment, preventing threat propagation across interconnected systems, whilst enabling shared learning from incidents benefiting entire ecosystems. Shah Amber, Managing Director at PwC India, stresses: “Data protection and digital trust are foundational to innovation and resilience in India’s financial ecosystem”—where breaches undermine confidence necessary for continued adoption and growth.
India’s fintech sector projects to grow to USD 400 billion by 2030, making cybersecurity an indispensable pillar for sustainable growth and customer confidence supporting continued adoption and ecosystem expansion. India’s fintech boom—propelling the nation to the forefront of digital financial innovation—simultaneously heightens exposure to sophisticated cyber threats that the PwC–UFF report identifies as existential challenges requiring immediate attention. With over 10,200 fintech firms serving 650 million smartphone users, the sector faces escalating attacks whilst global funding declines from USD 39.2 billion, creating dangerous vulnerabilities where 60% of incidents stem from supply chain compromises infiltrating through vendor systems. The report recommends multi-layered defenses—including Zero Trust Architecture with continuous authentication and micro-segmentation, AI-powered threat detection, quantum-resistant cryptography, and regulatory technology integration—whilst addressing severe talent shortages undermining defensive capabilities.
Collaborative frameworks enabling threat intelligence sharing, regular security audits, and strengthened enforcement of RBI cybersecurity guidelines and the Personal Data Protection Bill are essential for building digital trust supporting projected USD 400 billion sector growth by 2030. As industry leaders emphasise, protecting customer trust amidst rapid innovation requires vigilance, shared responsibility, and proactive defences ensuring cybersecurity becomes foundational rather than afterthought if India’s fintech ecosystem is to sustain growth, global leadership, and promise of inclusive digital finance.