From Digital Banking to AI Trading: The Top Cyber Risks Financial Institutions Face in 2026

• by Anthony Orjally
• Advent IM Blog

Financial institutions in 2026 are innovating faster than ever, but so are attackers. As digital banking, cloud services, and AI-based trading grow, so do cyber threats that can disrupt operations, damage trust, and cause financial losses.

Cyber Risk is now a Top Strategic Threat

A 2026 industry survey by the Depository Trust & Clearing Corporation (DTCC) shows that 63% of financial firms consider cyber risk a top-five threat. Importantly, 41% said cybersecurity vulnerabilities are the biggest risk tied to AI adoption.

AI governance and insufficient controls were cited as major concerns, highlighting the security challenges posed by machine learning and automation.

Cyber risk is no longer just an IT issue; it’s a strategic business risk.

Digital Banking Fraud Is Rising Rapidly

As banks push mobile and online offerings, criminals are exploiting that growth:

• A recent RTI filing showed nearly 16,000 cyber fraud cases across State Bank of India branches from Jan 2024 – Oct 2025, with losses of over ₹118 crore (~£12m) – particularly in online and mobile banking.
• Phishing remains a core threat, with the banking and finance sector being a prime target in 2025.

While digital services grow user convenience, they also expand the attack surface.

AI-Powered Attacks & Deepfake Scams

Cybercriminals now use AI to scale social engineering and fraud:

• AI-assisted phishing and deepfake scams surged in 2025, making detection and defence much harder. Analysts report AI-driven fraud tools are more scalable and convincing than ever.

A July 2025 scam involved a deepfake call impersonating a Deutsche Bank executive leading to an unauthorized transfer, underscoring how advanced social engineering now leverages synthetic media.

This aligns with government warnings that deep fake and AI-generated content pose rising threats to banking, finance, and insurance sectors, with forecasts of continued growth in such attacks.

Ransomware Still Hurts Financial Firms

Ransomware remained a stubborn problem into 2025–26:

• Around 12.8% of finance sector companies reported ransomware incidents in 2025 and detected ransomware events jumped nearly 36% over previous years.

This matches broader industry reporting showing ransomware as one of the top threats to financial services, especially when attackers encrypt data or steal it for extortion.

In 2026, the biggest cyber risks in finance are far more than technical glitches. They are strategic threats tied to:

• AI-enabled fraud and deepfake social engineering
• Phishing and credential exploitation
• Ransomware and data extortion
• Cloud and third-party vulnerabilities

These risks require cross-organisational planning, stronger governance, and adaptive security strategies – not just perimeter defences.