AI in Financial Crime: New Scams and How to Protect Yourself

Artificial intelligence (AI) makes employees more efficient. But it also makes hackers more efficient. With the advancement of highly developed digital tools, financial scams and frauds have become a consistent threat to businesses and consumers alike. From synthetic voices and phishing emails to AI-powered deepfakes, cybercriminals employ various tactics to attack. Is there a way to break free from this AI arms race and outsmart scammers using their own methods? Read on to find out.

How AI Fuels a New Generation of Financial Scams

As AI tech evolves, AI scams of various kinds are becoming more advanced. Cybercriminals get more creative (and innovative) in using the latest AI technology for profit. Here's a closer look at some of their latest AI-powered scams:

AI Deepfake Scams

AI deepfake scams involve manipulated videos of real people — often celebrities or public figures — created by cybercriminals who train AI models on the person's genuine videos and audio recordings. With sufficient data, AI can create videos of the individual in almost any environment. Imagine your favorite political figure sends you notice of a lucrative tax rebate, which leads you to a tax scam site that asks for your Social Security number.

Believe it or not, deepfakes have become a major concern for various industries and sectors, including finance and banking. For instance, in a widely reported case in Hong Kong, scammers used a deepfake video call to impersonate a company's CFO and convince an employee to transfer over $25 million. The AI-generated video was so realistic that the employee did not suspect any foul play.

Deepfakes can be increasingly hard to detect. Not to mention, it's getting simpler to deepfake nearly anyone because the internet is full of video content.

AI Phishing Scams

AI phishing scams are social engineering attacks that employ AI to trick you into revealing confidential information. In phishing scams, attackers often disguise themselves as people you can trust. However, phishers nowadays use AI tools to execute these scams in bulk.

Before AI, cybercriminals had to conduct extensive research and write customized messages. The most advanced scams, which can mimic a person's appearance or voice, were expensive and uncommon. That isn't the case anymore.

Now, AI tools can produce various personalized phishing messages in seconds. Hackers can automate their phishing and mimic voices and appearances at extremely low costs. For instance, AI tools can browse social media platforms such as LinkedIn and collect information on hundreds (and thousands) of individuals, including their career history, posts, and achievements. Then, they may craft highly customized messages for all with malware attached.

AI Voice Cloning Scams

AI voice cloning scams use artificial intelligence to copy a person's voice. Scammers then send messages or make phone calls pretending to be someone else, often a friend, family member, boss, or even a public figure.

Basic scams use pre-recorded voice messages. For example, you might get a call that sounds like a politician asking you to donate to a campaign. But the link they give is actually a trap.

More advanced scams use real-time voice cloning, where the scammer speaks during a live call using a cloned voice. This type of scam is especially dangerous. You might get a call that sounds like your boss urgently asking for sensitive information or a family member claiming to be in an emergency and asking for money. These situations are designed to cause panic and pressure you into acting fast before thinking it through.

Why Does AI Make These Scams More Dangerous?

AI scams are more difficult to spot because:

• They're Quick: AI can create replica emails, mimic voices, or build phishing websites in minutes.
• They're Scalable: Scammers can target hundreds of victims simultaneously with automated tools.
• They're Customized: AI can analyze data to craft personalized scams, increasing the success rate.
• They're Evolving: AI learns from failed attempts and gets better over time.

To put it briefly, AI provides scammers with a means to play wiser, quicker, and more convincingly, which often outperforms conventional defense measures.

How to Protect Against AI Scams

To help protect yourself (and your business) against emerging AI scams, keep up with the trends and growing AI capabilities. If you know how AI is employed to scam individuals, you will better recognize when someone attempts to scam you. Make sure to remain alert to suspicious behavior. Here are some red flags to look out for:

• Messages with a sense of urgency or fear (e.g., "Your account will be locked.")
• Unexpected messages from known contacts that feel out of character
• Unusual activity on your social media profiles

However, knowing the possible signs is only the first step in preventing AI fraud. To truly protect yourself, you need to combine awareness with proactive security measures and reliable technology:

Use AI-Powered Security Tools

Security tools with AI can help detect unusual patterns, flag suspicious activity, and respond to threats quicker than human teams. These tools often use machine learning to monitor login attempts, transactions, and behavior in real time.

Many banks and online platforms use AI for fraud detection. Don't believe us? Believe the statistics: 91% of banks in the US employ AI for fraud detection.

Implement Account Takeover Prevention

AI-powered fraud often aims to take control of your accounts by exploiting stolen credentials or manipulating authentication processes. Account takeover (ATO) attacks can lead to unauthorized access, financial loss, and identity theft.

To combat this, businesses should invest in specialized account takeover prevention tools. These tools monitor the deep web for leaked data and detect exposed credentials or active session cookies in real time.

Keep Software and Devices Updated

Cybercriminals often exploit outdated software to gain access. Ensure that all devices, including phones, laptops, and tablets, have the latest security updates installed.

Don't forget to enable automatic updates for operating systems, browsers, antivirus programs, and apps.

Educate Your Team

Cybersecurity is a team effort. Whether you run a business or manage your household's digital life, everyone must know how to remain safe.

Make sure to routinely educate others about:

• The latest types of scams
• Safe browsing habits
• How to spot suspicious emails or texts
• What to do in case of an account compromise

Final Thoughts

AI isn't going anywhere. While it benefits businesses, it also opens the door to more advanced financial scams. From deepfakes to phishing emails, cybercriminals use AI technology to deceive and steal from unsuspecting victims.

Make sure to understand how these scams work and be proactive. Remember, the future of financial safety isn't about avoiding technology. It's about using it wisely and staying informed.