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GenAI becoming an increasingly powering scams

A Wall Street watchdog has alerted that swindlers are increasingly utilizing generative artificial intelligence tools in advanced methods to defraud financial institutions, labeling this issue as an emerging risk.

For instance, scammers are producing fake identification papers to assist in opening phony new brokerage accounts or to seize control of customers’ current accounts, the Financial Industry Regulatory Authority, Wall Street’s self-regulatory body, stated Tuesday in a recent report. According to Finra, swindlers are in certain situations employing deepfake technology to produce images of GenAI-generated individuals displaying GenAI-created fake IDs.

However, GenAI can also amplify specific frauds, enabling, for instance, voice deepfakes designed to deceive fraud victims. Finra reported that it has observed swindlers utilizing deepfake audio and video to mimic prominent finance experts, along with GenAI producing phishing emails customized for specific individuals.

U.S. law enforcement agencies, such as the Federal Bureau of Investigation, have cautioned about the risks of AI being employed for illegal activities. According to a report from last year by Deloitte’s Center for Financial Services, fraud losses in the U.S. financial services sector may rise to $40 billion by 2027, increasing from $12.3 billion in 2023, due to the effects of GenAI.

Finra noted that it has observed GenAI utilized in generating fake websites that mimic companies and their employees to entice victims into transferring funds, as well as in the development of sophisticated malware. The regulator indicated that companies ought to evaluate if their cybersecurity initiatives sufficiently tackle risks linked to the possible misuse of GenAI.

Individually, Finra observed that the majority of financial organizations are adopting a careful approach in their utilization of GenAI for their objectives, yet they have been employing it to enhance the efficiency of certain internal tasks, like summarizing information or performing analyses across various data sets.

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Avijit Sah

Avijit Sah is a digital marketing expert specializing in SEO, social media, and content strategy. With a passion for helping businesses grow online, Avijit Sah uses data-driven tactics to boost visibility and engagement. Follow Avijit for the latest digital marketing tips and insights.

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