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A recent study from the U.K. warns that the rise of fake news and disinformation fueled by generative AI could significantly increase the risk of bank runs.
The research, conducted by Say No to Disinfo and Fenimore Harper, highlights that generative AI systems can effortlessly create misleading narratives on social media, indicating that banks may be facing security issues or that customers’ funds are at risk.
“As AI enhances the efficiency, affordability, and speed of disinformation campaigns, the emerging threat to the financial industry is escalating yet frequently dismissed,” the report noted. It emphasizes that web and mobile banking allow for rapid fund transfers, with findings showing that for every approximately $12 spent on social media advertisements by fraudsters, they can generate up to $1.2 million in illicit spending.
This growing threat emphasizes the need for banks and financial institutions to closely monitor account activity to detect patterns of withdrawals driven by false information, the study suggests. “While an event like this seems unlikely, it remains a possibility, making it crucial for financial organizations to be prepared,” stated Woody Malouf, the head of financial crime at Revolut, in an interview with Reuters.
Despite the risks, financial institutions remain optimistic about the potential of emerging technologies. “Banks are actively working to manage and lessen the risks associated with AI, while regulators are examining the potential challenges this technology poses to financial stability,” UK Finance told Reuters. This discussion coincides with the AI Summit in Paris, where industry leaders come together to explore the advancements of artificial intelligence. JD Vance has previously asserted that the U.S. should strive to produce the most powerful AI processors globally.
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