Artificial intelligence has the potential to revolutionise many industries, offering unprecedented efficiency. However, as with any new and powerful technology, AI also presents significant risks.
Enhanced phishing and social engineering
AI tools can significantly enhance phishing and social engineering attacks. Traditional phishing attempts often rely on generic messages sent to vast recipient lists, with the hope of tricking a small percentage into divulging sensitive information. AI, however, can analyse massive quantities of data to craft highly personalised and convincing phishing attacks. By mimicking the writing style and tone of trusted contacts, AI-generated messages have the potential to deceive even the most vigilant individuals.
Deepfake technology
One of the most alarming applications of AI in fraud is the creation of deepfakes, hyper-realistic digital forgeries of audio, video, or still images, generated using AI algorithms. Fraudsters can use deepfakes to impersonate individuals, creating fake videos or audio recordings that appear genuine. In 2023, Microsoft announced that their text-to-speech algorithm ‘VALL-E’ was capable of mimicking a voice when prompted with only a three second audio clip of an individual speaking.
When considered alongside the fact that several UK banking institutions allow for customers to confirm their identity using their voice alone, the potential for fraudulent activity is clear.
Automated attacks
AI enables the automation of large scale, complex fraud schemes. AI-powered bots can perform credential stuffing attacks, where emails and passwords obtained through data breaches are tested across thousands of websites to gain unauthorised access to personal accounts. These bots can operate at a scale and speed that would be impossible for humans, dramatically increasing their likelihood of success.
Countermeasures and the role of AI in defence
Whilst AI poses some significant new risks, it also offers powerful tools for combating fraud. AI-driven fraud detection systems can analyse transaction patterns, detect anomalies, and flag suspicious activities in real-time. Machine learning algorithms can continuously learn from new data, improving their ability to identify and prevent fraud over time. By leveraging AI, businesses and financial institutions can stay one step ahead of fraudsters.
How this impacts you
AI has the potential to amplify the capabilities of malicious actors far beyond what has previously been possible. As powerful AI tools become more accessible to the public, understanding how fraudsters are able to use them to target your business is essential when implementing effective fraud prevention strategies.
If you or your organisation has fallen victim to AI fraud, it is important to act quickly to preserve your assets. See our article for what to do if you find yourself in such a situation: What to do if...you suspect your organisation is being defrauded by someone you have a commercial relationship with.
If you think you have been a victim of fraud, or wish to seek legal advice on how to best protect yourself, please contact one of our experienced fraud team.
As tackling fraud becomes a priority in both the private and public sectors, Mills & Reeve has launched a new fraud forum, Deception Diaries. This forum will keep you informed about the evolving landscape and offer expert advice on trending fraud topics.
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