Artificial intelligence (AI) is an extremely powerful and useful technology. However, when it gets into the wrong hands, innovative smart tools may be used for malicious purposes. There’s no other sector more attractive to cybercriminals than banking and financial services. Therefore, financial institutions of all kinds must take all the precautions to safeguard their ecosystems and sensitive customer data from malicious AI use.?

Undoubtedly, artificial intelligence is a powerful tool for revolutionising business operations. As AI technology rapidly develops, global regulators and tech leaders urge responsible practices and comprehensive guidelines for its implementation. On the one hand, AI and machine learning (ML) enabled solutions are increasingly used to tackle numerous security challenges. On the other hand, the same technology is used by cybercriminals to create sophisticated threats like deepfake scams.

What Are the Dangers of Malicious AI Use?

Malicious use of artificial intelligence poses significant risks to most businesses and individuals. Here are some of the examples of AI-enabled cyber threats.

• AI can automate and enhance common cyberattacks, e.g. phishing, malware distribution, and denial-of-service attacks. Moreover, smart technology can adapt and evolve cyberattack strategies in real time, making it harder for traditional security measures to detect and combat them.
• AI can create highly convincing fake videos or audio samples, known as deepfakes, which can be used for disinformation, blackmail, or impersonation, potentially causing reputational damage or financial losses. Attackers can create deepfake videos of company executives making false announcements, spreading misinformation, or endorsing unethical actions. They can also imitate the voices of colleagues and clients, deceiving employees into performing unauthorised actions or revealing sensitive information.
• AI-powered systems can gather and analyse vast amounts of data from various surveillance sources (e.g., cameras, social media, online behaviour) to track and profile individuals. If one gets unauthorised access to the company’s internal AI systems, there is a lot of sensitive information there as well. The loss of privacy can lead to potential misuse of personal information by malicious actors, including the impersonation of a financial institution’s customer or employee.
• AI can be used to analyse and classify stolen sensitive data more effectively, enabling identity theft, financial fraud, and other illegal activities.
• AI can automate various malicious activities, such as creating fake product and company reviews, manipulating stock markets, or spreading propaganda and fake news affecting economic and financial situations.?
• AI systems can perpetuate or create biases in training data, leading to unfair treatment or discrimination in segments such as hiring, law enforcement, or lending. Malicious actors could exploit these biases to marginalise specific groups.
• The complexity and opacity of AI systems can be exploited by malicious actors to evade accountability for negative consequences.

What Can Financial Institutions Do to Protect Against AI Misuse?

All the potential threats mentioned above should be addressed by all responsible financial services providers. There are numerous ways an organisation can protect its data and operations from malicious AI use.?

Educate Staff on Emerging Threats

To oppose sophisticated AI threats, the institution’s personnel should gain the relevant knowledge, skills, and technical certification needed to protect the internal system, credentials, and data.?

If your organisation is using AI itself, employees should also learn to use AI systems safely so that they don’t become compromised. Quality AI security awareness training ensures employees understand associated risks and realise how to make ethical decisions when working with AI technologies.?

To safeguard your business from deepfake-powered attacks, you should employ training programmes or workshops to help them pay attention to any details that appear unusual or unrealistic, recognise suspicious content and react effectively. In addition, authorised employees should be aware of the incident response plan that outlines the steps to be taken in the event of a deepfake or AI-driven attack.?

As a business, a proactive financial institution should develop robust regulations, ethical guidelines, and technical safeguards for AI systems use and data security and make sure every employee is aware of the risks and consequences of a security breach or ignoring AI ethics. Besides theoretical education, the company should conduct regular security drills, such as phishing or deepfake attack simulations, to test and reinforce employee awareness and response.

Invest in Cybersecurity

The most advanced cybersecurity means are evolving to address AI threats. For instance, different tech tools help to combat deepfake scams with the help of AI-powered KYC verification, audio detection, blockchain, biometric authentication, digital watermarking, deep neural networks, etc.?

Many solutions aiming to detect computer-manipulated content are powered by AI itself. They can achieve 96%- 99% accuracy. To compare, a recent study discovered that humans can detect deepfake speech only 73% of the time and make systematic mistakes when classifying deepfake and authentic video.?

Other elements of a robust cybersecurity strategy include firewalls, antivirus software, multi-factor authentication (MFA), identity and access management, data-at-rest and in-transit encryption, Intrusion Detection and Prevention Systems (IDPS), and regular security updates for corporate IT systems.??

Therefore, to remain competitive and protected, firms have to invest in the most upgraded and forward-looking cybersecurity systems and tools. A combination of a security-orientated corporate culture, employees empowered with AI threat awareness, and advanced cybersecurity tools helps create a safe and proactive business environment.?

Develop Response and Communication Plans to Mitigate AI-Induced Reputational Damage

As we have already mentioned, AI deepfakes can be used not only to instil direct financial losses but also to stain the firm’s reputation, manipulate share prices, and affect its market status and credibility. Reputational damage is hardly avoidable when attackers create deepfake videos of company executives making false or unethical announcements. In the case of volatile and highly interconnected markets such as digital currencies, deepfake attacks can also deeply affect the asset value.?

Establishing a dedicated team responsible for responding to security incidents, including investigating, containing, and mitigating the impact is critical to swiftly address the emerging cybersecurity threats. There must be a well-documented plan outlining procedures for identifying, responding to, and recovering from security incidents.

A financial institution must also prepare dedicated customer communication plans in the event an AI-enabled disinformation or manipulation campaign impacts public confidence in the firm itself or the banking/fintech sector altogether. If the sector players support each other and have a common strategic plan, a coordinated sector response can quickly calm the market and sustain consumer trust.