Through strategic measures and a united front, the finance industry can overcome the looming threat of deepfakes.

Kevin Kirkwood, Deputy CISO, LogRhythm

August 30, 2023

4 Min Read
Digital face, suggesting a deepfake
Source: Luis Moreira via Alamy Stock Photo

With the rise of deepfake technology, the financial sector faces a new and growing threat landscape, as malicious actors exploit artificial intelligence (AI)-generated content to perpetrate fraud and social engineering attacks. However, according to a Pew Research study, 61% of people feel "it is too much to ask of the average American to be able to recognize altered videos and images." This poses a significant challenge for financial professionals to safeguard themselves and their clients in the increasingly dishonest digital environment.

The Impending Peril of Deepfakes in Finance

Deepfakes have the potential to deceive individuals and manipulate financial transactions, posing significant risks to institutions and their customers. The idea that deepfakes are being used to impersonate the deceased adds a new layer of complexity to this already challenging issue and underscores the overall difficulties financial institutions experience when faced with deepfakes.

The ability to convincingly mimic the appearance and voice of individuals can facilitate impersonation scams, enable fraudulent transactions, and compromise sensitive information. Deepfakes' lifelike qualities can make it difficult to discern between real and altered content, which raises the risk of falling for fraud.

Examples of Deepfakes in Finance

Deepfakes can manifest in many ways within the realm of digital deception. Deepfake technology allows fraudsters to pose as high-ranking executives or CEOs, changing their voices and appearances to trick investors or employees into carrying out transactions or disclosing sensitive information. These deepfake-driven impersonation frauds cause huge financial losses and harm to individuals' and companies' reputations.

Deepfakes can also be used to manufacture financial reports and manipulate data, as well as compromise market integrity and damage trust by producing fake representations of financial information. The true financial status of companies can be distorted by these false narratives, fooling investors and authorities. Financial reports fabricated using deepfake technology can convey deceptive information, inflate performance indicators, or conceal risks. As a result, investors may make poor decisions and regulatory oversight may be compromised.

Additionally, deepfakes have been used to tamper with financial transactions and compromise confidential data. For instance, fraudsters might use deepfake "voice" technology to fabricate kidnapping and ransom requests, compelling victims into disclosing sensitive financial information or authorizing fraudulent transactions due to exploited emotions. Deepfakes can circumvent security measures and seize control of financial resources by impersonating a person's voice, mannerisms, and other distinctive features.

How to Fortify Your Defenses Against Deepfakes

A proactive and comprehensive strategy is needed to combat deepfakes in any industry. Fortunately, organizations can reduce the risks and protect their operations by leveraging methods such as these.

  1. Heighten awareness and training: It's vital to prioritize education and training in the financial sector. Inform staff members and clients of deepfakes, the dangers of impersonation fraud, and dishonest business practices. Encourage people to approach communications and requests with care and skepticism and to do so through established channels. By fostering a culture of skepticism and caution, people can better safeguard themselves and their financial transactions.

  2. Strengthen verification processes: Implement thorough transaction and individual verification procedures. Utilize numerous layers, such as extra identification documents or out-of-band checks through different communication channels. Financial institutions can reduce the risk of unauthorized access and fraudulent activity by putting strict verification measures in place.

  3. Promote customer assistance channels: Encourage customers to report shady activity or requests using easily accessible methods of communication. Create clear channels and offer instructions on reporting practices. Making sure clients can readily contact you for help makes it easier to respond quickly and effectively mitigate any hazards.

  4. Implement code words and complete profile views: Low-tech solutions can provide workable methods of verification. Use profile views in videos to prevent fraudsters from obtaining a full 180-degree perspective of the subject. Additionally, implement rolling code words to determine a person's authenticity.

In the face of impending peril posed by deepfakes in the financial sector, fortifying defenses becomes imperative. Financial professionals must navigate a world where it is difficult to spot manipulated content as the digital environment becomes more dishonest. Innovative solutions and steadfast commitment are needed to protect financial companies and their clients.

To secure the integrity of financial transactions and uphold the confidence that underpins the industry, the way forward involves constant adaptation, being aware of innovative technology, and working with experts to understand and protect against risks. Through strategic measures and a united front, the finance industry can overcome the looming threat of deepfakes and maintain the security and confidence of its stakeholders and customers alike.

About the Author(s)

Kevin Kirkwood

Deputy CISO, LogRhythm, Test

Kevin Kirkwood leads the internal practice of security for LogRhythm. His teams include governance, risk and compliance (GRC), application security (AppSec), security operations center (SOC), and physical security. This concentration in security practice, tools, and operations enables Kevin’s team to ensure that they provide a safe foundation to build the security platforms of the future while protecting employees, systems, and customers.

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