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AI is a major threat and financial organizations are not doing enough to fight it

Reports predict continued increases in financial fraud until better safeguards in place
AI is a major threat and financial organizations are not doing enough to fight it
 

Behavioral biometrics firm Biocatch’s 2024 AI, Fraud, and Financial Crime Survey does not mince words in assessing how generative AI has impacted the financial sector. “Financial crime poses an existential threat to financial institutions, their customers, and our society as a whole,” says the report.

Among the significant numbers it contains are the 69 percent of respondents who say that criminals are more advanced at using AI for financial crime than banks are at using AI to fight it, and the 72 percent of respondents who say their organization has faced cases of synthetic identities when onboarding new clients.

“Banks are facing a variety of emerging threats, many of which are powered and/or enabled by AI,” says the report. “At the same time, banks are investing in AI and integrating solutions that leverage this technology. But it isn’t enough. Further investment is needed. Thanks in part to AI, criminals are innovating faster than banks can keep up.”

A concrete example is the case of voice verification, which AI seems to be annihilating trust in, as 91 percent of financial services or banking organizations rethink the use of voice verification given the risks of audio spoofs and voice cloning.

Many believe having better ways to share information and collaborate with regulatory authorities would help matters. Better biometrics is also touted as a key solution. “Employing behavioral biometric intelligence will allow financial institutions to leverage the only element of digital identity that is truly human and almost impossible to replicate, thus providing better protection for their customers,” says the report. “By applying methods like fraud telemetry, continuous behavioral sequencing, and predictive intelligence, leading financial institutions and banks can keep customers safe from digital fraud and build long-lasting trust.”

In short, financial crime is happening, mostly online, and it is likely to keep rising unless organizations invest more to match technological wits with AI-equipped fraudsters.

GenAI personal assistants could soon be everywhere

Mastercard has its own thoughts on 2024’s emerging tech trends. Its Signals feature says advances in three areas – artificial intelligence, computational power and data technology – are propelling technological advances at an unprecedented speed.

In predicting how AI will affect our lives, Mastercard lists generative AI personal assistants as a soon-to-be common feature in everything from how we shop to who (or what) drives our cars. It estimates that the market for intelligent virtual assistants will be worth $46 billion by 2028. AI will also help enhance code for better efficiency. And, it will help fight the fraud tactics enabled by its misuse, such as deepfakes, with the deepfake detection market expected to grow 42 percent annually through 2026.

Dan Yerushalmi, CEO of identity intelligence firm Au10tix, says his company has protected clients around the globe against over $18 billion in business fraud since 2021. In 2023, it stopped twice the amount of fraud that it had in 2021, and 70 percent it prevented was synthetic AI-generated fraud. Ultimately, Yerushalmi echoes others’ thoughts on what can now be said to have emerged as a defining tech trend of 2024. “The escalating threats of cybercrime and digital fraud necessitate stronger safeguards for customer identity and personal information,” he says.

In other words, in the case of preventing financial and identity fraud, there’s always room for improvement.

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