INDUSTRY FACT FILE · BANKING

Five New Case Studies in Banking Security

Original 2026 case studies, each written as a blog post, showing how current threats play out under RBI's 2026 cybersecurity Directions and how Codec Networks services break the attack chain.

In this document 1.  About these case studies 2.  Case Study 1: The Mule Network Hiding in Plain Sight 3.  Case Study 2: The ATM Switch That Was Someone Else's Problem 4.  Case Study 3: Ransomware on a Friday Night 5.  Case Study 4: The Fintech API That Overshared 6.  Case Study 5: The CEO's Voice on the Phone

These five case studies were written for this document set and have not been published elsewhere. Each is a composite scenario: it combines attack techniques and control failures widely observed in banking with the regulatory obligations that apply in India as of October 2026—in particular RBI's Cybersecurity, Technology: Risk, Resilience and Assurance Framework Directions issued on 31 July 2026.

Important disclosure The banks described are fictional and the scenarios are illustrative. They are not accounts of real incidents, and they are not Codec Networks client engagements or claims of achieved outcomes. Their value lies in showing how connected weaknesses form an attack chain, which controls break it, and which services test those controls.

Case study	Bank type	Core threat	Regulatory lens	Primary bundles
1. The Mule Network Hiding in Plain Sight	Small finance bank	Mule accounts and pass-through fraud	2026 Directions; KYC/V-CIP; PMLA	B7, B8, B4
2. The ATM Switch That Was Someone Else's Problem	Urban co-operative bank using a shared ATM switch	Third-party switch compromise and cash-out	2026 Directions (third-party ATM switch controls)	B9, B7, B3
3. Ransomware on a Friday Night	Mid-sized public sector bank	Ransomware and backup destruction	2026 Directions (DR, CCMP, DAKSH); CERT-In	B7, B10, B8
4. The Fintech API That Overshared	Private sector bank	Partner API data exposure	Outsourcing Directions 2025; 2026 Directions; DPDP	B2, B9, B6
5. The CEO's Voice on the Phone	Foreign bank branch	Deepfake voice and payment diversion	2026 Directions; SWIFT CSP	B10, B7, B5

How rented and synthetic accounts turned a growing small finance bank into a transit point for scam proceeds.

At a glance
Organisation	A digitally growing small finance bank (“Bank A”) with fast app-based account opening
Threat	Mule accounts receiving and moving fraud proceeds
Why it is new	Tests risk-based transaction monitoring and customer-notification expectations in RBI's 2026 Directions, alongside the growing use of AI mule-detection models
Codec Networks services	Onboarding and V-CIP controls review, mule-detection use cases in the CSOC, forensic investigation (Bundles B7, B8, B4)

The scenario

Bank A's digital onboarding grew quickly. A fraud network recruited people to 'rent out' their accounts and opened others using borrowed or synthetic identities that passed basic document checks.

Most accounts stayed quiet for weeks. Then each began receiving dozens of small inbound transfers—payments from victims of investment and task scams—and forwarding the money within minutes over UPI and IMPS to accounts at other banks.

Bank A learned of the pattern only when complaints reached the National Cybercrime Reporting Portal and freeze requests arrived from law enforcement. By then most of the money had moved on.

Figure 8: Illustrative attack path for Case Study 1 and the controls that break it.

What went wrong

• Onboarding checked documents, not behaviour. Device reuse across many new accounts and mismatched profiles were never correlated.
• No pass-through rules. Accounts that received and forwarded funds within minutes did not trigger alerts.
• Dormancy was treated as low risk. Sudden activation of dormant accounts was not monitored.
• Fraud and security data were siloed. The CSOC saw logins and devices; the fraud team saw transactions; nobody saw both.

The impact

Bank A faced freeze and information requests, customer complaints, questions about the quality of its KYC and suspicious-transaction reporting to FIU-IND, and reputational damage with partners and customers.

The regulatory lens

• RBI 2026 Directions: risk-based transaction monitoring across channels and customer notification through alternate channels for payments above a customer-set value.
• KYC directions: customer due diligence, including V-CIP standards for video-based onboarding.
• PMLA: reporting of suspicious transactions to FIU-IND by the bank's Principal Officer.
• Industry tools: RBI Innovation Hub's MuleHunter.AI had been adopted by 29 banks as of July 2026.

How Codec Networks would help

Need	Codec Networks response	Bundle
Stop mules at the door	Onboarding and V-CIP process testing using realistic synthetic profiles; device and liveness checks review	B4, B10
See the pattern early	CSOC use cases combining device, login and transaction signals; pass-through and dormancy rules	B7
Investigate and evidence	Forensic analysis of the account cluster; evidence for regulators and law enforcement	B8

Key lessons Monitor behaviour, not just documents. Treat rapid pass-through as a red flag. Watch dormant accounts that wake up suddenly. Join security and fraud signals in one view.

A shared ATM switch provider's admin account was phished on a Friday. By Monday, the bank's cards had been cashed out across the country.

At a glance
Organisation	An urban co-operative bank (“Bank B”) running its ATM and card switch through a shared service provider
Threat	Compromise of a third-party ATM switch and unauthorised limit changes
Why it is new	RBI's 2026 commercial bank Direction now lists baseline controls for third-party ATM switch providers; co-operative banks face the same threat under their own framework
Codec Networks services	Third-party and ATM switch provider assessment, CSOC monitoring, infrastructure review (Bundles B9, B7, B3)

The scenario

Bank B, like many co-operative banks, relied on a shared ATM switch provider. An attacker phished an administrator at the provider and logged in to the switch management console.

Over a weekend, the attacker raised withdrawal limits on a set of Bank B's cards and disabled fraud rules. A cash-out crew withdrew money from ATMs in several cities using cloned cards.

Bank B noticed only during Monday's reconciliation, when settlement figures did not match expected activity.

Figure 9: Illustrative attack path for Case Study 2 and the controls that break it.

What went wrong

• No MFA at the provider for privileged console access.
• Limit changes did not alert the bank. Changes made at the provider were invisible to Bank B in real time.
• Contracts lacked baseline security controls and audit rights over the switch environment.
• No weekend monitoring of switch activity or unusual ATM withdrawals.

The impact

Bank B absorbed the losses, reissued cards, informed customers and faced questions from its supervisor about oversight of the outsourced switch.

The regulatory lens

• RBI 2026 Directions (commercial banks): baseline control areas for third-party ATM switch service providers, built into contracts, with incident reporting to the bank and periodic VA/PT; audit and RBI access rights for IT/cyber third-party arrangements.
• Urban co-operative bank Direction (2026): graded requirements apply according to the bank's level.
• CERT-In Directions: reporting of specified incidents within six hours.

How Codec Networks would help

Need	Codec Networks response	Bundle
Fix the contract	Contract security review against the baseline controls; audit-right clauses	B9
Test the provider	Independent assessment of the switch provider's privileged access, MFA and logging	B9, B3
Watch the weekend	CSOC alerts on limit changes and unusual ATM withdrawal patterns	B7

Key lessons Outsourcing a service does not outsource the risk. Require MFA and logging at every provider with privileged access. Make limit changes visible to the bank in real time. Monitor around the clock, including weekends.

A single phishing email became a bank-wide outage. The real test was whether recovery and reporting had been rehearsed.

At a glance
Organisation	A mid-sized public sector bank (“Bank C”) with a large branch network and mixed legacy and modern systems
Threat	Ransomware with backup deletion and data theft
Why it is new	Tests the half-yearly DR drill, Cyber Crisis Management Plan and 6-hour DAKSH reporting requirements of RBI's 2026 Directions
Codec Networks services	Managed CSOC, ransomware simulation, backup and DR testing, incident response (Bundles B7, B10, B8)

The scenario

A branch employee opened a convincing email attachment. The malware gave the attacker a foothold, and over several days they moved laterally, harvested credentials and obtained domain administrator rights.

On a Friday night, the attacker deleted reachable backups and launched encryption across branch servers and several central systems. Branch operations and some digital services stopped.

The bank had to contain the attack, decide on recovery, communicate with customers and report the incident to RBI and CERT-In within six hours.

Figure 10: Illustrative attack path for Case Study 3 and the controls that break it.

What went wrong

• EDR coverage was incomplete, and alerts on unusual credential use were not investigated overnight.
• Backups were reachable from the compromised domain.
• Privileged accounts were not tiered, so one compromise opened most systems.
• The crisis plan existed on paper but had not been rehearsed with the people who would execute it.

The impact

Bank C faced service disruption, recovery costs, customer complaints, supervisory scrutiny and questions about data exposure.

The regulatory lens

• RBI 2026 Directions: DR drills for critical systems at least half-yearly with DR running for a full working day; a documented Cyber Crisis Management Plan; CSOC with 24x7 Level 1 monitoring; cyber incidents reported on DAKSH within six hours of detection.
• CERT-In Directions: reporting within six hours and retention of ICT logs for 180 days in India.
• DPDP Act and Rules: once breach provisions commence in May 2027, intimation of personal data breaches to the Data Protection Board.

How Codec Networks would help

Need	Codec Networks response	Bundle
Detect early	24x7 CSOC with EDR/XDR and credential-misuse use cases	B7
Prove recovery	Backup isolation testing, DR drill observation, ransomware simulation	B10, B1
Respond and report	IR retainer, forensic RCA, DAKSH and CERT-In reporting support	B8

Key lessons Assume a phishing email will succeed; detect what follows. Keep backups out of the attacker's reach and restore them regularly. Tier privileged access. Rehearse the crisis plan and the 6-hour report.

A co-lending partner integration returned whole customer records when it needed a handful of fields—and a leaked credential did the rest.

At a glance
Organisation	A private sector bank (“Bank D”) with several co-lending and fintech partnerships
Threat	Data exposure through a partner API and leaked partner credentials
Why it is new	Combines RBI's 2025 outsourcing directions, the 2026 Direction's third-party and application security requirements and upcoming DPDP obligations
Codec Networks services	API security testing, third-party risk management, DPDPA programme (Bundles B2, B9, B6)

The scenario

Bank D built an API so that a co-lending partner could check loan status. To save time, the API returned the full customer record, including KYC details.

A developer at the partner accidentally published API credentials in a public code repository. An attacker found them and pulled thousands of records before the activity was noticed.

Samples of the data appeared on a dark-web forum, and Bank D had to determine what was exposed, notify stakeholders and report the incident.

Figure 11: Illustrative attack path for Case Study 4 and the controls that break it.

What went wrong

• No data minimisation: the API returned far more than the partner needed.
• Long-lived, broadly scoped credentials with no IP restrictions.
• No anomaly detection on bulk API access.
• Partner security was not tested beyond a questionnaire.

The impact

Bank D faced regulatory reporting, customer notification, partner contract disputes and reputational harm, and had to suspend the integration while controls were rebuilt.

The regulatory lens

• RBI Managing Risks in Outsourcing Directions, 2025 and the 2026 Direction's third-party provisions: due diligence, contracts, audit and RBI access rights.
• RBI 2026 Directions: application security testing throughout the lifecycle and data leak prevention covering data in transit and at rest.
• CERT-In Directions: reporting of data breaches and leaks within six hours.
• DPDP Act and Rules: reasonable security safeguards and breach intimation once those provisions commence.

How Codec Networks would help

Need	Codec Networks response	Bundle
Minimise and test APIs	API security testing including authorisation and data-exposure checks	B2
Assure partners	Partner security assessment beyond questionnaires; credential and secrets review	B9
Prepare for privacy duties	Data-flow mapping, DPIA and breach workflow	B6

Key lessons Give partners only the data they need. Scope, rotate and restrict API credentials. Alert on bulk or unusual API access. Test partners' controls, not just their answers.

A cloned voice and a well-timed email persuaded a treasury team to bypass its own controls.

At a glance
Organisation	A foreign bank branch in India (“Bank E”) with an active treasury and corporate banking business
Threat	Deepfake voice impersonation and payment diversion
Why it is new	AI voice cloning makes executive impersonation cheap and convincing; tests verification and maker-checker controls
Codec Networks services	Deepfake and vishing simulation, SOC monitoring of payment anomalies, governance review (Bundles B10, B7, B5)

The scenario

An attacker used public videos to clone the voice of a senior executive. On a busy afternoon, a treasury officer received a call in that voice about a confidential, urgent transfer, followed by an email from a look-alike domain.

Under pressure, the officer arranged for an outward transfer outside the normal approval path. The funds moved through several accounts within hours.

When the real executive was later contacted, the fraud was discovered. Only part of the money could be traced and recovered.

Figure 12: Illustrative attack path for Case Study 5 and the controls that break it.

What went wrong

• Verification relied on recognising a voice. There was no mandatory call-back on an independent channel.
• Maker-checker could be bypassed for 'urgent' requests.
• Look-alike domains were not detected or blocked.
• Staff had never practised against a realistic deepfake scenario.

The impact

Bank E suffered a direct loss, faced questions from its head office and supervisor about control design, and had to retrain staff and tighten payment procedures.

The regulatory lens

• RBI 2026 Directions: foreign bank branches follow a 'comply or explain' approach for specified chapters; requirements include DMARC, anti-phishing services and risk-based transaction monitoring.
• SWIFT Customer Security Programme: controls over payment operators and interfaces for banks using SWIFT.
• CERT-In Directions: reporting of specified incidents within six hours.

How Codec Networks would help

Need	Codec Networks response	Bundle
Practise against deepfakes	AI-powered deepfake and vishing simulations for treasury and senior staff	B10
Catch unusual payments	SOC and fraud alerts on out-of-pattern outward payments	B7
Close the bypass	Review of payment governance, maker-checker and call-back procedures	B5

Key lessons Never authorise payments on the strength of a voice. Make call-back on an independent channel mandatory. Remove 'urgent' exceptions to maker-checker. Block and monitor look-alike domains.

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