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- 🤖 AI & fraud
Good morning and welcome to the latest edition of neonpulse!
Today, we’re talking about the intersection between AI and fraud — because it could potentially be dangerous.
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AI & Fraud
AI is great. If you didn’t think so, you probably wouldn’t be reading this email. But there’s no denying that AI also comes with significant risks – the use in fraud is one of them.
In her role as the Chair of the Federal Trade Commission, Lina Khan is at the forefront of the Biden administration's efforts to tackle the dominance of massive tech companies accused of stifling competition. One area of particular concern for Khan is the rapid rise of AI, which she believes poses a potential threat to consumers in the United States.
Khan recently expressed her apprehension about the misuse of AI to amplify fraud and scams, pointing out the need for vigilance against anti-competitive practices. She is determined to ensure that tech giants with market advantages do not use their power to quash competition, advocating for open and contestable markets where smaller players can thrive.
And Lina is not alone. Banks, investors, and insurers are being urged to bolster their defenses against scammers leveraging AI for fraudulent activities. Nikhil Rathi, CEO of the Financial Conduct Authority in the UK, emphasized the escalating risks of cyber fraud, cyber-attacks, and identity fraud as AI gains widespread adoption in a speech in London.
Companies like OpenAI and Midjourney have made significant progress in generative AI, triggering a rush among businesses to harness its potential for increased productivity. However, the ease with which AI can manipulate language, audio, and video has raised concerns about its misuse.
The UK's Prime Minister, Rishi Sunak, aims to position the country as a hub for AI regulation. The FCA's focus on AI forms part of a broader initiative to regulate the burgeoning financial products offered by the big tech sector.
Rathi will caution that AI technology poses heightened risks for financial firms, making senior managers ultimately responsible for AI-driven decisions within their organizations. He stresses the urgent need for increased investment in fraud prevention, operational resilience, and cyber defense to keep pace with the expanding adoption of AI.
While AI can enhance financial models, customer support, and fraud detection, it has also been exploited in financial scams. Rathi will highlight an incident involving a deepfake video of prominent personal finances campaigner Martin Lewis, raising concerns about the need for regulatory action to prevent similar scams.
Although AI offers potential benefits for financial markets, Rathi will also underscore potential risks, such as increased price volatility due to automated trading robots and biased datasets that, if relied upon by AI, could pose significant harm.
Do you think AI will do more harm than good? |
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