Deepfake Identity Scams: A Growing Threat to Financial Security

As the threat of deepfake technology grows, the regulatory environment surrounding it remains complicated and underdeveloped. Globally, efforts to regulate and mitigate AI misuse are only beginning to take shape, and financial regulators face significant hurdles in keeping pace with the rapid development of AI and deepfake technology. Current regulations, such as cybersecurity compliance standards, were not crafted with deepfake technology in mind, leaving significant gaps in protection and response mechanisms.

In addition to national and international regulations, financial institutions will likely encounter regulatory challenges at the state or regional level, where deepfake-related laws vary and may conflict with each other. Institutions operating across borders face added complexity, as they may be subject to diverse sets of rules on digital deception, data handling, and incident reporting. Consequently, regulatory adaptation is crucial to addressing the risks posed by deepfake technology, and institutions must be ready to meet potential new standards while building robust internal controls to mitigate the current and future risks of AI-driven deception.