Amateurs are using AI in banking scams reports BioCatch image credit: shutterstock

Nearly 70% of the fraud-management, anti-money laundering, and risk and compliance officials surveyed by BioCatch say criminals are more adept at using AI to commit financial crime than banks are at using the technology to stop it. BioCatch surveyed fraud fighters in 11 countries on four continents. Around one-half of the fraud-fighters report an increase in financial crime activity in the last year. And they expect to see financial crime activity increase in 2024.

The report depicts a troubling and burgeoning trend. Criminals with minimal technical expertise or financial crime skillset are using this new technology to improve the quality, reach, and success of their digital-banking scams and financial crime schemes.

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“Artificial intelligence can supercharge every scam on the planet,” said Tom Peacock, BioCatch Director of Global Fraud Intelligence. “AI gives us scams without borders. It will require financial institutions to adopt new strategies and technologies to protect their customers.”

The rise of synthetic identity fraud

91% of respondents report their organisation is now rethinking voice-verification for big customers due to AI’s voice-cloning abilities. More than 70% say their company identified the use of synthetic identities while onboarding new clients last year.

The Federal Reserve believes traditional fraud models fail to flag as many as 95% of synthetic identities used to apply for new accounts. It regards synthetic identity fraud as the fastest-growing type of financial crime in the US, costing companies billions of dollars every year.

“We can no longer trust our eyes and ears to verify digital identities,” BioCatch CMO Jonathan Daly added. “The AI era requires new senses for authentication. Our customers have proven behavioural intent signals are those new senses. It allows financial institutions to sniff out deepfakes and voice-clones in real time to keep people’s hard-earned money safe.”

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BioCatch 2024 AI, Fraud and Financial Crime Survey: other key findings

  • AI (Already) an Expensive Threat: More than half of the organisations represented in the survey say they lost between $5m and $25m to AI-powered attacks in 2023.
  • Financial Institutions Also Using AI: Nearly 3/4 of those surveyed say their employer used AI to detect fraud and/or financial crime. 87% say AI has increased the speed with which their organisation responds to potential threats.
  • We Need to Talk: More than 40% of respondents say their company handled fraud and financial crime in separate departments that did not collaborate. Nearly 90% of those surveyed say financial institutions and government authorities need to share more information to combat fraud and financial crime.
  • AI to Help with Intelligence-Sharing: Nearly every respondent says they anticipate leveraging AI in the next 12 months to promote information-sharing about high-risk individuals across different banks.

“Today’s fraudsters are organised and savvy,” BioCatch CEO Gadi Mazor said. “They collaborate and share information instantly. Fraud fighters – including technology-solution providers like us, along with banks, regulators, and law enforcement – must do the same if we expect to reverse the growing fraud numbers across the globe.”

BioCatch’s 2024 AI, Fraud and Financial Crime Survey is available via this link