Ongoing advocacy efforts and artificial intelligence-powered fraud prevention tools have done wonders to help community banks fight fraud, but criminals are fanning the flames with AI of their own. They’re using AI tools to generate phishing emails, create deepfake videos, clone voices, build synthetic identities and deploy bots to execute fraud schemes autonomously.
Fraud and scam operators have access to easy-to-use, low-cost tools that are readily available on the dark web. These tools make technologies that were recently considered cutting-edge, like real-time deepfake videos, accessible to even the most low-skill criminals. On the other end of the spectrum, highly sophisticated nation-state actors are using commercial, off-the-shelf tools to perpetrate large-scale fraud.
The proliferation of AI-enabled fraud and scams has the potential to erode the relationships between community banks and their customers. When AI can effectively mimic either party, it threatens these trust-based relationships, which makes doubling down on fighting fraud incredibly important.
The good news is that community banks can use AI to fight AI. AI-powered systems monitor transactions in real time, spotting behavioral anomalies that rules-based systems miss. They adapt and learn from each fraud attempt, becoming more effective over time. Natural language processing highlights evolving phishing tactics. Voice authentication detects deepfake audio artifacts. These solutions operate 24/7, 365 days a year without adding headcount, which frees existing staff to focus on relationship banking.
Adopting these solutions does not have to be a heavy lift. As a first step, identify your highest-risk areas. Wire transfers, account takeovers or small business accounts could be good places for an initial foray into AI fraud fighting.
Next, look for solutions that integrate with existing core systems. Carefully evaluate vendors to see if they have worked with community banks and can adequately explain how their tools make decisions. Finally, train staff to interpret and act on recommendations. The goal is to keep humans in the loop, not replace them.
Enhancing AI fraud prevention infrastructure is also a way to enhance customer relationships. Build customers’ confidence by explaining how you are using AI to protect them from complex AI attacks. Use these conversations to educate customers about fraud and scams, using physical handouts when available as lasting takeaways.
Community banks must continue to evaluate and adopt AI fraud prevention tools. The technology is more accessible than ever, but the arms race continues. Proactively identifying and addressing opportunities to use these new solutions will enable banks to better protect their customers, deepen trust and build stronger relationships.
In the fraud war, the lesson is clear: When criminals fight with fire, community banks must be ready to fight back with fire of their own.
