The US Treasury Department has said AI is making it easier than ever for criminals to commit fraud against financial companies.
The warning echoes those of the Consumer Financial Protection Bureau, the Federal Reserve and the Securities and Exchange Commission, which have also highlighted the risk AI poses to the financial industry.
AI tools have brought about a major change, especially in the field of phishing, as they allow malicious actors to write persuasive emails with correct grammar and spelling, even in different languages.
Sharing information can prevent fraud
Malicious actors are increasingly turning to AI to perfect their attacks, and the ability to artificially generate voice and video has taken impersonation to new heights. In the report submitted by the Ministry of Finance, Undersecretary of Home Finance Nellie Liang said: “Artificial intelligence is redefining cybersecurity and fraud in the financial sector.”
Efforts to control the increase in fraud targeting financial companies have met with limited success due to the lack of established tools to combat these attacks. However, the Biden administration has said it will use advanced technologies to help companies with identity and prevent fraud.
One concern highlighted in the report is that of “regulatory fragmentation,” as federal and state agencies set different rules and regulations for AI. The Biden administration has proposed several executive orders on regulating AI, but state-level regulation is just getting off the ground.
Another concern is that smaller companies without the funding or manpower to use complex and expensive fraud detection systems may fall victim to AI-enabled fraud at a higher rate. This has prompted the American Bankers Association to create an information sharing plan where companies can share the information. intricate details about the fraud threats they have faced.
Through Bloomberg