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01/02/2024
The Impact of AI-Generated Synthetic Fraud on Finance
ABA Banking Journal
Fake people are having a major impact on our real world. AI technology has empowered even the most elementary of fraudsters with sophisticated tools that allow them to piecemeal real-looking identities, creating havoc for businesses across all verticals. The rise of AI-generated fake identities poses a serious threat to the integrity of financial systems, with consequences extending into the realms of politics and society. Synthetic fraud, the creation of fabricated identities using personal information from real individuals, is on the rise, with potential financial losses in the billions.
Despite substantial investments in fraud prevention, financial institutions are struggling to combat synthetic identity fraud, where AI is used to create fake identities, engaging in activities like opening lines of credit, checking bank account balances, or making small deposits. The ability to create images and convincing audio files complicates the issue, enabling the creation of deepfakes that deceive even the most discerning individuals.
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