How do deepfakes impact banks and other financial institutions?

financialexpress.com:

The unsettling narratives of individuals falling victim to AI-based deepfake scams, such as a Kerala man losing ₹40,000, a woman losing Rs 1.4 lakh to an AI voice scam, and a man being duped out of over Rs 5 crore by a scammer employing AI face-swapping technology, are just a glimpse into the broader challenge. In India, financial entities find themselves contending with an emerging and chilling risk – the proliferation of deepfakes.

These highly authentic fabrications, propelled by artificial intelligence, are emerging as a formidable tool for fraudsters, exploiting the vulnerabilities inherent in the digital financial landscape. While the creative potential of this technology is evident, its malevolent applications have already resulted in tangible real-world losses.

Fraudsters utilising deepfake videos in Video KYC (Know Your Customer) can pose potential threats to banks and other financial services. To reduce the risk of deepfake fraud, the Reserve Bank of India (RBI) has enforced the requirement of live video for KYC. The integration of security upgrades, like personalised dynamic randomised questionnaires for individual users, is designed to strengthen security measures and reduce the likelihood of fraud, particularly in credit applications.

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Ghost fraud, involving the misuse of a deceased person’s data for financial gain, is another perilous facet. Exploiting a deceased individual’s identity, fraudsters gain unauthorised access to online services, manipulate savings, tamper with credit scores, and apply for credit cards, loans, or benefits. The spectre of deepfakes looms large in scenarios such as annuity/pension, insurance, or benefit fraud,