According to a report by Bloomberg on August 22, deepfake technology, powered by artificial intelligence (AI), is increasingly being used by criminals in imposter scams, posing a significant threat to individuals and the banking industry. Regulators, law enforcement agencies, and financial institutions are taking urgent action to protect consumers against the surge in cybertheft and financial scams. The report highlights that deepfake technology has led to more sophisticated and damaging fraud schemes as scammers use AI to create computer-generated voices that are almost indistinguishable from real ones. By exploiting people's trust and emotions through social engineering scams, scammers achieve alarming success rates. Additionally, they utilize stolen data from the dark web, creating fake IDs and masks using social media photos to bypass face ID systems. The proliferation of online banking has opened up new avenues for scammers as face-to-face interactions decrease. This puts pressure on banks, regulators, and law enforcement to counter the increasing level of fraud. The integration of AI in scams not only increases their volume but also makes them harder to detect and prevent due to the enhanced customization.

Deepfake imposter scams have been identified as one of the most significant threats to the financial industry by experts from major banks. To combat these scams, banks are investing in defensive technology and raising awareness among consumers about the associated risks. The report notes the use of surveillance tools to monitor and flag suspicious activities, along with blocking potentially fraudulent transactions. The banking industry is also urging tech companies to take responsibility for the financial scams that occur through their platforms. Investment fraud, in particular, has experienced a surge, with scammers using search engines and sponsored advertising to target victims. Governments and financial institutions are pushing for new legislation and measures to tackle online financial scams due to the increasing costs associated with fraud. Research by PYMNTS reveals that FinTechs lose an average of $51 million annually to fraud, representing approximately 1. 7% of their revenue. With fraud schemes evolving and being enabled by technology, FinTech fraud has grown 13% in the past year, according to a collaborative report by PYMNTS and Sezzle titled "The Path to FinTech Profitability Must Be Fraud-Proof. "