'Keep me awake': Kotak Bank CEO on rising AI threats
What's the story
Kotak Mahindra Bank's MD and CEO, Ashok Vaswani, has expressed his concerns over the rapid evolution of artificial intelligence (AI) tools, including Claude and Mythos. He said these advancements are changing how banks perceive cybersecurity threats. The speed and scale of potential attacks are now a major concern for financial institutions, Vaswani said during the bank's March quarter earnings conference.
Evolving threats
Machine-speed attacks
Vaswani highlighted the rapid evolution of AI-driven threats, saying, "If there is one thing that keeps me up at night, surely this is the one." He warned that cyber risks are changing fundamentally. Banks have always been prepared to deal with cyberattacks at human speed, but now have to deal with them at machine speed. This shift requires banks to upgrade their response capabilities significantly.
Policy response
Policy-level concern
The concern over AI-driven threats is also being echoed at the policy level. Finance Minister Nirmala Sitharaman recently asked banks to prioritize strengthening their cyber defenses, promptly report suspicious digital activity, and engage top cybersecurity experts. She chaired a high-level meeting with scheduled commercial banks and key stakeholders, during which she advised the Indian Banks' Association (IBA) to develop a coordinated institutional mechanism for swift responses to such threats.
Rapid spread
Preparing for the transition
As advanced AI systems are adopted by large global firms, their vulnerabilities could spread rapidly across interconnected systems. Vaswani stressed the need for banks to patch these vulnerabilities at an enhanced rate. He also revealed that the teams within Kotak Mahindra Bank are already aware and preparing for this transition.
Ongoing crisis
West Asia war impact
When asked about the impact of the West Asia war, Vaswani said it hasn't materially affected the bank's books yet. However, he warned against complacency, saying "it would be naive to assume that there is no impact." The bank has increased monitoring across portfolios and is engaging with customers to assess contingency plans.
Financial results
Kotak Mahindra Bank Q4FY26 results
Despite the ongoing crisis, Kotak Mahindra Bank reported a net profit of ₹4,027 crore for Q4FY26, up 13% year-on-year and 17% quarter-on-quarter. The bank's provisions fell to ₹516 crore from ₹909 crore a year ago. Its loan growth rose 16% year-on-year to ₹4.96 trillion, while deposits grew 15% year-on-year to ₹5.72 trillion. However, the bank expects margins may come under some pressure going forward.