Staying Ahead of AI Scams

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It’s indisputable that artificial intelligence (AI) is having a “moment,” to say the least. From social media apps to streaming services and even household appliances, AI has rapidly evolved and seemingly integrated into most of our lives in one form or another.

Unfortunately, fraudsters are capitalizing on this technology to create increasingly sophisticated scams. By understanding how AI-driven fraud is evolving, credit unions can stay ahead of these scams and implement proactive measures.

A New Era of Fraud

Fraudsters are leveraging AI to develop scams that are much more convincing than the average spam emails we’re accustomed to. These days, credit unions need to watch out for:

• Deepfake Videos: AI is being abused to create highly realistic video content. These videos can impersonate executives, family members, or trusted institutions to authorize fraudulent transactions.
• Voice Cloning: Another form of impersonation fraudsters are employing involves using AI to replicate an individual's voice with just a few seconds of recorded audio for reference. In some cases, this technology helps fraudsters pose as trusted contacts to manipulate sensitive transactions.
• Enhanced Phishing: AI-powered phishing emails and texts have become more convincing than ever, mimicking communication styles and personalizing messages based on social media or other publicly available data.

Protecting Your Data

Thanks to the accessibility of AI, we’re also able to use it to our advantage. Here are some ways that credit unions can protect their data and empower members to do the same:

• Member Education: Inform members about these new scams through newsletters, social media, and other relevant communication channels. Reinforce that you will never contact them requesting their financial information, and share ways they can verify identities.
• Fraud Detection Tools: AI-driven fraud detection systems are an example of using AI to our advantage. There are tools and services available to help financial institutions monitor and flag unusual patterns in real time.
• Two-Factor Authorization: Encourage the use of two-factor authorization (also known as multi-factor authorization) to provide an additional layer of security against fraudsters.

AI isn’t only a tool for fraudsters; it’s also a powerful resource for credit unions to protect members. By adopting advanced fraud detection technologies and fostering awareness among staff and members, credit unions can stay ahead of AI-driven fraud. For additional resources on combating fraud or to learn more, join the Cornerstone Fraud Council.