India's Rapid Digitisation and the Need for Robust Cybersecurity Measures

The personal information of 815 million Indians recently emerged on the dark web, signifying a major data breach.

The personal information of 815 million Indians has emerged on the dark web, signifying a major data breach. It is reported that the compromised data comprises Aadhaar and passport particulars, as well as names, contact numbers, and both current and permanent addresses of millions of Indian citizens.

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India’s rapid digitisation of its financial space has indeed brought about significant changes, including increased access to financial services and greater convenience for users. However, it has also exposed the financial sector to new challenges, such as scams and data breaches.

Earlier this month, a cybersecurity solutions provider with a global presence based in the United States reported that “millions of records containing personally identifiable information, including Aadhaar cards,” were available for purchase on the dark web.

The personal information of 815 million Indians has emerged on the dark web, signifying a major data breach. It is reported that the compromised data comprises Aadhaar and passport particulars, as well as names, contact numbers, and both current and permanent addresses of millions of Indian citizens.

Recap: What Was the Need for Aadhar?

Aadhaar was introduced in India in 2009 to address multiple pressing needs, including the lack of a standardised and reliable identification system, the promotion of financial inclusion by facilitating access to formal banking services, the reduction of fraud and duplication in government welfare programs, the simplification of access to government services, and the advancement of digital initiatives.

It aimed to streamline and improve the efficiency of service delivery while consolidating multiple identification documents into a single, universally accepted ID for various services. Aadhaar assigns a unique 12-digit identity number to all Indian residents, collected through biometric data like fingerprints, retina scans, and facial photos.

This biometric database, with around 1.2 billion enrolled, covers approximately 89 percent of India’s population.

Despite its benefits, Aadhaar has its drawbacks.

It raises concerns about:

(1) privacy due to data leaks

(2) vulnerabilities when used as a substitute for official photo IDs

(3) ethical questions surrounding data utilization for AI software development

These issues, interconnected and overlapping, have the potential to transform Aadhaar into a tool for extensive state surveillance.

Challenges Associated With Rapid Digitisation

India is currently grappling with a series of data breaches, starting with the CoWIN data breach that compromised the personal information of numerous Indians. Now, the Aadhaar data breach raises significant concerns. With biometric data freely accessible, the question arises: what lies ahead in terms of data security and privacy?

As biometric data becomes more readily available, particularly in the context of increasing digitization and data breaches, there is a growing concern about the trajectory of data security and privacy.

Biometric data, which includes unique identifiers like fingerprints, retina scans, and facial recognition, is highly sensitive and has the potential to grant unprecedented access to an individual’s identity. While biometrics have been employed to enhance security and convenience, their widespread use also poses significant risks.

The increased availability of biometric data raises concerns about unauthorized access and misuse. Once such data is in the wrong hands, it becomes a powerful tool for exploiting individuals or committing crimes.

Additionally, the question arises regarding the legal and ethical boundaries of biometric data usage. As biometrics are integrated into various aspects of our lives, from unlocking smartphones to accessing bank accounts, it becomes essential to establish clear regulations and safeguards. Protecting individuals from unwarranted surveillance and ensuring the ethical handling of biometric data are paramount.

Moreover, the growing dependence on biometric authentication methods in both the public and private sectors necessitates robust cybersecurity measures. It is imperative to continually advance security protocols to thwart cyber threats that target biometric data. Biometric systems must be fortified against hacking, breaches, and impersonation attempts.

Furthermore, the broader societal implications of widespread biometric data usage must be examined. This includes potential shifts in power dynamics, privacy erosion, and the need for enhanced transparency and accountability in how biometric data is collected, stored, and used.

The Need for Robust Cybersecurity Measures

The pace of digitisation has sometimes outstripped the development of robust cybersecurity measures and regulatory frameworks, leading to vulnerabilities in the financial system.

The rapid digitisation of the financial space brings both advantages and challenges. While it enhances financial inclusion and efficiency, it also exposes vulnerabilities, including a surge in financial scams such as phishing and Ponzi schemes that exploit the speed and anonymity of online transactions, leading to financial losses.

Data breaches, exemplified by the recent Aadhaar data leak, heighten concerns about personal information security, potentially resulting in identity theft and financial fraud. Furthermore, fast-paced digitization often outpaces regulatory adaptation, creating uncertainties in areas like cryptocurrencies and online lending platforms.

Ensuring consumer protection in digital financial transactions becomes crucial, as users may not fully grasp their rights or how to seek remedies in disputes or fraud cases. Cybersecurity remains a paramount concern, demanding continual improvement in security measures to safeguard digital transactions against evolving cyber threats.

Despite these challenges, India is actively working on addressing them. The government and regulatory authorities have introduced various measures to enhance cybersecurity, improve regulatory oversight, and protect consumers in the digital financial space. Initiatives like the Digital India program and the push for digital payments have driven the growth of India’s digital economy.

India’s rapid digitization of its financial space has brought both opportunities and challenges. While the speed of transformation has exposed vulnerabilities, the government and financial institutions are taking steps to mitigate risks and ensure a secure and resilient digital financial ecosystem. It is a complex and ongoing process, to harness the benefits of digitisation while safeguarding users and their financial well-being.

(Sanhita Chauriha is with Vidhi Centre for Legal Policy. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)