The Treasury Department stated that fraudsters are finding it simpler to execute increasingly complex attacks on financial institutions because of artificial intelligence in a report released on Wednesday.
According to the agency, recent developments in AI have made it possible for criminals to more convincingly mimic speech or video to pose as clients of financial institutions and gain access to accounts.
Additionally, they enable malevolent actors to create phishing emails that are more complex and contain fewer errors in formatting, according to the Treasury.
“Artificial intelligence is redefining cybersecurity and fraud in the financial services sector,” in a statement that accompanied the report, Under Secretary for Domestic Finance Nellie Liang stated that it was required under a presidential executive order issued the previous year.
The organization is the most recent to issue cautions regarding AI, which has both potential benefits and drawbacks. Prominent financial authorities, such as the Consumer Financial Protection Bureau, the Securities and Exchange Commission, and the Federal Reserve, have expressed concerns on a range of issues, including potential systemic risk and prejudice.
According to Liang, the Biden administration will collaborate with financial institutions to leverage cutting-edge technologies while “guarding against threats to operational resiliency and financial stability.”
The Treasury Department interviewed 42 people for the report, including representatives from data suppliers, anti-fraud and anti-money-laundering organizations, and the financial services and IT sectors. One worry was the possibility of “regulatory fragmentation” when state and federal authorities establish AI regulations.
Treasury stated that to guarantee that regulatory actions are coordinated, it will collaborate with the Financial and Banking Information Infrastructure Committee, which is charged with enhancing cooperation amongst financial regulators, as well as the industry-led Financial Services Sector Coordinating Council.
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