The IMF report argues that AI-driven cyber threats should no longer be viewed solely as operational risks for individual financial institutions, but as potential sources of systemic financial instability. For India, this shift is significant given the rapid expansion of digital finance through UPI, RTGS, NEFT, digital banking, and cloud-based services. The report highlights that growing reliance on shared cloud providers, common software platforms, and AI-enabled financial services could amplify correlated cyber risks. India’s regulators should embed cybersecurity within macroprudential oversight, with the RBI, SEBI, IRDAI, IFSCA, and CERT-In introducing system-wide cyber stress testing that simulates AI-driven attacks on payment systems, financial market infrastructure, and shared technology platforms. Macroprudential surveillance should incorporate indicators capturing cyber-related vulnerabilities from common digital infrastructure, third-party technology dependencies, and interconnected financial networks. Increasing reliance on a small number of cloud providers, AI platforms, and technology vendors also creates concentration risk.