Realtime adaptive security developed using AI is becoming norm for banks to counter security threats:
Banks across the world are now eliminating static, rule-based systems to adopt dynamic, proactive, self-learning and real-time adaptive tools created with the help of Artificial Intelligence (AI) to handle security. These tools are broadly described as advanced, AI-driven cybersecurity systems, continuously monitoring, analyzing and automatically adjusting security policies to not just counter threats of whatever nature as they occur, but more crucially prevent them as well wherever possible.
Currently, these tools are capable of analyzing huge volumes of transactional and user behavior data instantly, identifying and mitigating the ever-evolving threats. It is basically AI that is behind the real-time adaptive security and it is done by taking up behavioral analytics and user profiling and transaction monitoring on a real-time basis. Systems are now in place for adaptive authentication, eliminating those based on passwords; there are platforms deployed like SOAR, or Security Orchestration, Automation and Response, which upon detection of a threat, initiate action and systems that facilitate reduction in false positives (JPMorgan Chase has such a system, which has reduced false-positive rates by over 50%, saving time and costs. The possibilities are limitless.
CREATING BASELINE
The real-time adaptive security tools establish a baseline of normal user activity using machine learning (ML) tools and User and Entity Behavior Analytics (UEBA). They can then identify deviations – like unusual login locations, atypical spending patterns, or impossible travel times. If a user’s behavior seems unusual or risky, the system triggers step-up authentication without impacting legitimate users.
The tools also enable creation of systems that can monitor transactions in real-time to detect fraudulent actions before they are completed. When a threat is detected, the system automatically takes action – like blocking the transaction, isolating a compromised endpoint, and restricting user access, without requiring human intervention.
The tools also are designed under the ‘never trust, always verify’ principle.
SOME KEY TOOLS
Some of the technologies and tools global banks have already implemented include RASP, or Runtime Application Self-Protection and Device Attestation, SIEM, or Security Information and Event Management, ITDR, or Identity Threat Detection and Response, and API Security Tools.
The key functionality of these tools is fraud detection. The technologies that are used here include deep learning and predictive analytics, automated risk scoring and decision-making and NLP.
However, even as financial services institutions are plugging the loopholes in the security systems, cybercriminals are upgrading their AI prowess. They are known to have developed AI-powered fraud schemes that can mimic legitimate user behavior.
BE PROACTIVE
One unique advantage that AI provides to banks and financial services institutions is that it enables banks to proactively identify fraud risks by analyzing historical fraud data and recognizing emerging attack patterns. Some of the technologies that help in this effort are Blockchain and AI, together which can provide an additional layer of security for financial transactions, quantum computing, which can process vast amounts of data at unprecedented speeds, and the recent development of AI-driven fraud detection models.
Some of the real-time adaptive security tools specific for banks include those for real-time fraud detection and transaction monitoring, Feedzai, which provides a RiskOps platform for large banks that integrates fraud detection and AML with AI-driven contextual risk scoring, Cleafy, which offers proactive, session-based fraud prevention that provides visibility across web, mobile and APIs, Fraud.net, which is a platform for enterprise financial institutions focusing on B2B synthetic fraud, Mastercard Decision Intelligence for assessing risk in real-time for transactions, reducing fraud and false declines and BCT Digital, which is a real-time monitoring system for evaluating transactions for suspicious activity.
USE AMONG INDIAN BANKS
AI-based real-time adaptive security tools have gained currency among Indian banks. Popular among them is the ML-based tools to analyze massive transaction volumes in milliseconds. Some of the leading banks are also using Feedzai for dynamic risk assessments, Decentro Scanner and OmniScore, which are created for the Indian market, to detect UPI frauds by identifying patterns like rapid successive small-value transactions, and Perfios TrustArmour, which is used in preventing document and identity frauds during loan underwriting.
The Reserve Bank of India has in 2025 created the Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) for all AI security tools to follow. RBI has also developed an AI platform, Digital Payments Intelligence Platform, or DPIP, that detects and prevents digital payment fraud in real time. The platform analyzes data from banks, telecom and cybercrime agencies to identify risky transactions and provide pre-transaction alerts.
What is noteworthy is that the focus is shifting to prevention-based systems.
SYSTEMS IN USE IN INDIA
Another key development is that some of the major banks – State Bank of India, HDFC Bank and Axis Bank – have deployed AI-powered fraud engines that monitor transactions across cards, UPI and internet banking. These systems process billions of data points like device IDs, location, typing patterns and even time-of-day behaviour to identify anomalies instantly.
Indian banks have also implemented Real Time Risk Analytics, where every transaction passes through multiple AI checkpoints – like behavioural profiling, network intelligence, transaction scoring, etc.
AI that powers all real-time checks and counter checks does not just protect accounts; it generates confidence in digital banking. It is acquiring the status of a real-time intelligence set-up that safeguards the whole ambit of banking – from a simple payment approvals over UPI to substantial credit approvals to fund transfers to just a simple account opening.
Read previous article here: https://bankingfrontiers.com/hdfc-life-app-nudges-and-empowers-sales/
