In December 2024, the FBI warned Americans of the potential for scammers to use generative artificial intelligence to perpetuate large-scale fraud. “Criminals use AI-generated text to appear believable to a reader in furtherance of social engineering, spear phishing, and financial fraud schemes,” the alert said.
As fraudsters evolve their tactics, generative AI’s ability to create text, images and video will make it easier for customers to get tricked — and for criminals to bypass a financial institution’s protections.
A November 2022 report from the consultant Oliver Wyman and the American Bankers Association, “The Growing Significance of Trusted Digital Identities in U.S. Financial Services,” noted three areas where weaknesses in identity verification can lead to 
problems for a bank: verifying an identity when onboarding a new customer, authentication — when a customer logs into their mobile banking app, for instance — and transaction authorization and monitoring.
Institutions need to determine that a customer or prospective client is who they say they are, and whether the person is a bad actor. That’s especially challenging in digital channels. But institutions increasingly rely on numerous data points and behaviors to make those confirmations — and will need to continue to tweak those processes to stay ahead of fraudsters while providing a smooth experience for real customers.
Mike Grisevich, assistant vice president of digital banking solutions at COCC, explains that onboarding can merely serve as a fraudster’s foot in the door. “The real risk emerges 30 or 60 days after onboarding, when some users assume the institution is no longer monitoring activity,” he says. “They’ll start to test the waters out and experiment with suspicious or harmful behaviors.”
To learn more about verifying the digital identity of customers, download the report, sponsored by COCC, here.
Previous