Criminals are more skilled at using AI to commit financial crimes than banks are at using AI to stop them, according to a BioCatch survey.
BioCatch surveyed fraud-management, anti-money laundering, and risk and compliance officials from 11 countries. Nearly 70% reported an increase in financial crime activity over the past year and about half of the respondents say they anticipate a further rise in financial crime activity in 2024.
The report reflects a disturbing trend in cybersecurity. Criminals with minimal technical expertise or financial crime skills are using AI technology to improve the success of their digital-banking scams and financial crime schemes.
A report released from the U.S. Treasury Department echoes this trend of banks struggling to keep up with evolving AI technology that has enabled fraudsters to easily impersonate customers and spread malware.
“The financial services sector is increasingly subject to costly cybersecurity threats and cyber-enabled frauds,” according to the report, which was compiled based on 42 in-depth interviews with bank executives in late 2023.
“As access to advanced tools becomes more widespread, it is likely that, at least initially, cyberthreat actors utilizing emerging AI tools will have the advantage by outpacing and outnumbering their targets,” the Treasury Department report said.
Securities and Exchange Commission Chairman Gary Gensler has warned that unchecked AI systems could potentially lead to a future financial collapse.
The SEC has made a rule that publicly traded companies must tell about hacking incidents that could affect their investors. This rule aims to make it clearer how cyberattacks affect companies’ profits by making them report breaches within four days.
BioCatch’s 2024 AI, Fraud and Financial Crime Survey key findings:
- AI a Costly Threat: More than half of the surveyed organizations lost between $5m and $25m to AI-powered attacks in 2023.
- Financial Institutions Using AI: Nearly 75% of respondents’ employers use AI to detect fraud and financial crime. 87% report AI has sped up their response to potential threats.
- Collaboration Needed: More than 40% of respondents said their companies deal with fraud and financial crime separately. Almost 90% believe banks and government authorities should share more information to fight these problems.
- AI for Intelligence-Sharing: Almost everyone surveyed plans to use AI in the next year to share information about high-risk people across different banks.
As AI technology is used in new ways by cybercriminals, the financial services industry, and all industries, need to invest in their own AI methods to reduce cyber risks.
