Finance Minister Nirmala Sitharaman on Saturday emphasized the need for a unified know-your-customer (KYC) system across India’s financial sector to streamline the verification process for consumers. Speaking at an event in Mumbai commemorating the Securities and Exchange Board of India’s (Sebi) 38th Foundation Day, she called on the market regulator to spearhead efforts toward a more integrated KYC framework.

Highlighting the inefficiencies of the current fragmented system, Sitharaman noted that users often face repeated verifications when accessing different financial products and platforms. She advocated for a seamless, secure, and portable KYC experience that leverages digitization and common regulatory standards. According to the minister, Sebi is well-positioned to facilitate this convergence due to its scale and advanced digital infrastructure.

Sitharaman also urged Sebi to transition from reactive oversight to anticipatory regulation in order to effectively address emerging risks. She pointed to threats posed by artificial intelligence-driven market abuse, cybersecurity vulnerabilities, and cross-border fraud, underscoring the importance of a regulatory approach that learns from past incidents without being hindered by them. “The measure of institutional quality is not the absence of such episodes, but the speed and rigour of the corrective response and the structural improvements that follow,” she said.

In addition to regulatory vigilance, the finance minister sounded a warning about the potential consequences of major cyberattacks on the financial system. She cautioned that an attack targeting a significant exchange, depository, clearing corporation, or large intermediary could disrupt markets nationwide, lead to substantial wealth erosion, and damage public confidence. Sitharaman stressed that as cyberattack methods evolve rapidly, defensive measures must advance even more swiftly.

While acknowledging advancements made by Sebi in strengthening cybersecurity frameworks and adopting AI-powered surveillance tools, she called for continued investment in defense capabilities and increased public awareness campaigns to combat digital fraud. The finance minister’s remarks reflect growing concerns about the need to modernize regulatory practices and protect India’s financial infrastructure in an increasingly complex digital landscape.