The Reserve Bank of India has warned that the financial sector could face new risks because banks and financial institutions are increasingly dependent on a small number of technology, cloud and artificial-intelligence providers.
RBI Deputy Governor Rohit Jain highlighted the issue at the Global Fintech Fest 2026. He said that if multiple financial institutions depend on the same technology provider, a major failure or cyber incident at that provider could potentially affect several institutions simultaneously.
The concern is known as technology concentration risk. Traditionally, financial institutions have focused heavily on managing risks within individual banks. However, shared technology infrastructure means that a problem affecting one major provider could potentially spread across many organisations.
Cloud computing, AI models and external technology platforms are becoming increasingly important in banking. These systems can improve efficiency, customer service and financial innovation, but they also create new dependencies.
RBI officials have stressed that financial institutions must continue to remain responsible for customer outcomes even when technology, cloud infrastructure or AI models are provided by external companies.
The warning comes as Indian banks and fintech companies rapidly adopt artificial intelligence and digital services. Strong cybersecurity, backup systems, vendor diversification and effective contingency planning could therefore become increasingly important.
The RBI’s message highlights a major challenge for India’s digital financial sector: technology can make banking faster and more efficient, but excessive dependence on common providers can also create system-wide vulnerabilities.
