The once-amusing realm of deepfakes, has entered a sinister new phase by targeting the financial technology sector. These AI-generated forgeries pose a significant threat, demanding increased vigilance from both Fintech companies and their customers, especially in the SEA region. Really, what crimes that transpired into the Fintech landscape? Taking recent data from an AltIndex survey, 46% of fintech businesses experienced synthetic identity fraud, 37% in voice deepfakes, and 29% faced video deepfakes. These frauds used AI as a tool to commit these financial scams. One major concern is regarding creation of financial accounts fraud using voice or video deepfakes. The development of deepfake can be used to bypass Know Your Customer (KYC) protocols as fintech companies usually have a face or audio verification system. It is used to confirm the user’s identity and scammers can pretend as a legitimate applicant to fool the system in granting new account access. New accounts with a legitimate identity could be used for money laundering or credit payments before they use up limits and disappear. Even more worrying is the emergence of synthetic identity fraud. Here, deepfake AIs are used to create entirely fictitious individuals with their own identities. The very same thing with using voice or video deepfakes, criminals combined these AI Generated faces with fabricated personal details to make it seem like a real person. Thus, they use the synthetic identities to apply for credit cards, loans, even establishing fake businesses to cover money laundering operations. Fintech companies that rarely use traditional identity checks must work harder in detecting these non-existent people. Modern problems require modern solutions While deepfakes pose a serious challenge, fintech companies are not defenseless. If you’re wondering the answer to these deepfake problems, fintech companies are increasing AI systems to encrypt, secure, and fight these frauds. Fintech companies start using more developed multi-factor authentication (2FA) and OTP AI systems to remove the risk of deepfake crimes. 2FA and OTP systems require users to additional verification steps beyond just a password or identity verifications. Additionally, more businesses are investing in advanced liveness detection software that can analyze facial movements and identify deepfakes with greater accuracy. Another great effort, some fintech players also collaborate with personalized and humanized AI communications adhering to their users needs. In addition, these tailored interactions also build trusts with their user, developing financial security and protection knowledge regarding their services. A personalized AI system will increase the role of customers' understanding of deepfake frauds. Users will learn that safeguarding private financial information and scrutinizing account activity for suspicious transactions are crucial steps. Advanced AI systems also help them conveniently report any suspected deepfake attempts so companies immediately can help prevent further fraud. Deepfake technology is constantly evolving, so the fight against deepfake crimes requires continuous adaptation. By working together, fintech companies and their customers can stay ahead of these emerging threats and safeguard the financial future. Source: - Altindex: Deepfake Frauds on the Rise: One-Third of Businesses Already Affected by Some AI-Assisted Fraud, more than 80% See it as a Threat - Equifax: What Is Synthetic Identity Theft? - Mitto: Transforming Asia’s FinTech Landscape with Advanced Communication and Verification Solutions - TrendMicro: How Underground Groups Use Stolen Identities and Deepfakes