The State of Deepfake Threats in Finance

The financial sector stands at a critical juncture as deepfake technology becomes an existential threat to institutions and AI-powered fraud surges by 2,100%, per Signicat.

Even more alarming is the preparedness gap among enterprises. While more than three-quarters of organizations now acknowledge deepfakes as a common fraud method, only 22% have implemented specific measures to combat AI-driven fraud. This disconnect between awareness and action creates a perfect storm: sophisticated attacks meeting inadequate defenses.

Understanding who is targeted, how they're attacked, and why they're vulnerable is crucial for protecting against these next-gen threats.

Financial Advisors and Investment Bankers

Financial advisors and investment bankers are prime targets for deepfake impersonation, leveraging their trusted client relationships and access to significant financial resources. Fraudsters create deepfake videos to mimic these professionals and exploit their credibility for financial gain.

This was demonstrated in a notable case in Sydney, where a financial advisor was discovered using deepfake technology to interact with clients, highlighting how this technology can be misused to breach trust in advisor-client relationships.

Third-Party Relationships

The exploitation of trusted third-party relationships represents a significant threat vector. Criminals use deepfake impersonations of both financial services employees and external entity partners to gain unauthorized access or extract funds from financial institutions.

A striking example occurred in 2020 when a deepfake business email compromise of a company director resulted in a $35 million transfer by a Hong Kong bank manager, facilitated by sophisticated social engineering that included deepfake phone calls and follow-up emails from both the bank manager and a lawyer.

Banking Consumers

Individual banking consumers face increasing risks as voice authentication systems become more vulnerable to deepfake attacks. Financial institutions utilizing voice authentication without additional security measures are particularly susceptible, as fraudsters can combine voice cloning with stolen personal information to initiate fraudulent transactions.

This vulnerability was notably demonstrated when a Wall Street Journal reporter successfully cloned their own voice to bypass their bank's authentication system.

Consumer Identity Fraud

The broader consumer landscape faces challenges from fraudsters using generative AI to create fake identification documents and establish fraudulent bank accounts. According to recent data, 46% of businesses have been targeted by identity fraud fueled by deepfakes, with synthetic identity fraud accounting for 33% of fraud events reported by U.S. businesses.

This trend is particularly concerning as underground websites now offer sophisticated fake identification capable of bypassing verification systems for as little as $15.

The Employment Vector

A growing concern is the use of deepfake technology by threat actors to bypass HR checks and gain employment within financial institutions. This method has been used for various malicious purposes, including espionage, sanctions avoidance, and gaining initial access to systems.

A particularly telling example emerged in July 2024 when a cybersecurity firm inadvertently hired a North Korean IT worker who had used a deepfake identity to obtain employment as an AI software engineer.

C-Suite Impersonation

Executive impersonation represents one of the biggest threats to financial institutions. Deepfake videos and audio of C-suite leaders can be used to bypass traditional security measures and initiate fraudulent transactions or gain unauthorized access to sensitive information.

In a 2024 case, cybercriminals tricked the employee of a global engineering firm to transfer $25 million by staging a fake video conference featuring the AI impersonation of the company's CFO and other trusted actors. 

The Escalating Nature of Financial Deepfake Threats

The sophistication and frequency of deepfake attacks continue to rise at an alarming rate. Financial institutions face an overwhelming diversity of risks from these attacks, including market risk from false information manipulating financial markets, information security risk enabling malicious actors to infiltrate systems, and significant fraud risk through social engineering. The regulatory landscape adds another layer of complexity, as hiring or dealings with sanctioned individuals may be illegal even if their identity was concealed through deepfake technology.

Perhaps most concerning is the reputational risk these attacks pose. Disinformation campaigns leveraging deepfakes can severely damage consumer trust and institutional credibility, causing long-term damage to brand reputation that can take years to rebuild. The financial sector's reliance on public trust makes it particularly vulnerable to these reputation-damaging attacks. Professionals in finance and banking, third-party relationships, consumers, members of the workforce, and C-suite leaders are at high risk from these emerging attack vectors enabled by generative AI.

Protecting Against Deepfake Threats

As deepfake attacks continue to evolve and proliferate, financial institutions must look to robust detection mechanisms to expand their cybersecurity measures and prevent expensive legacy verification systems from becoming obsolete.

Recent data from Rugula shows that 92% of businesses worldwide experienced identity fraud in the past 12 months, with the average losses from deepfakes in the financial industry having reached $603,000 per incident. These numbers are particularly dire when experts estimate AI fraud losses will cause $40 billion in damages to US companies alone by 2027.

Reality Defender helps secure critical communication channels against deepfake impersonations, enabling institutions to interact with confidence. Our solutions provide real-time defenses across pre-existing workflows, ensuring seamless integration into call center stacks or web conferencing platforms. Meanwhile, compliance with latest data security standards and flexible deployment options—be they cloud-based or on-site—ensures safety and privacy.

With proven robustness and continuous engineering for resilience, Reality Defender offers the comprehensive protection that’s become essential in today's rapidly evolving cyberthreat landscape.

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