Indian banks need to act fast—AI adoption and privacy-focused technologies are no longer optional but a necessity under the Digital Personal Data Protection Act (DPDPA), says a new Protiviti report. Unveiled at the 4th IBA CISO Summit 2025, the report highlights how banks must overhaul their systems with privacy-by-design approaches to align with India’s stringent data protection law. The DPDPA’s sweeping impact means banks must rethink critical functions like KYC and fraud detection while integrating automated compliance solutions.
The banking sector faces unique risks, from algorithmic profiling to third-party data sharing, making strong privacy frameworks essential. The report suggests leveraging AI-driven tools to streamline privacy management and meet enhanced obligations for Significant Data Fiduciaries (SDFs). These include regular data audits, algorithmic transparency, and appointing Data Protection Officers—requirements that demand more than just a one-time compliance checklist.
With DPDPA intersecting with RBI and SEBI regulations, banks must align existing policies like data retention and breach reporting while embracing a proactive, risk-based approach. The key takeaway? Compliance must evolve alongside emerging threats, technological advancements, and shifting regulations—all while maintaining customer trust and driving digital innovation in India’s banking landscape.