Deepfakes Empower Authorized Push Payment Scams

In an increasingly digital world, technology has made life more convenient – and created opportunities for sophisticated fraud. Deepfake technology is a prime example – so much so that FinCEN is warning financial institutions of its rising use in scams such as Authorized Push Payment (APP) fraud. As deepfakes make this already lucrative scam even more deceptive, understanding the threat and having robust payments fraud controls in place is paramount.

Deepfakes: Pushing the Boundaries of APP Fraud

APP scams rely on social engineering and the power of suggestion to manipulate a victim into authorizing a payment. Now, deepfake technology is propelling these scams into a more dangerous and manipulative era of ultrarealism.

A deepfake is a video, photo, or audio recording that appears authentic, but has been manipulated with artificial intelligence (AI). This technology can create, edit and replace faces, and synthesize speech. According to FinCEN, “deepfakes can manufacture what appear to be real events, such as a person doing or saying something they did not actually do or say” – and the FBI believes this technology can make scams more believable while reducing the time and effort required to execute them.

Deepfake-enabled APP scams rely on our human inclination to believe what we see – and the cost can be severe. Recently, an employee at a multi-national company wired over $25 million to fraudsters. The call with seemingly familiar colleagues and the firm’s CFO was actually part of a deepfake-enabled Business Email Compromise (BEC) scheme, and everyone on the video were deepfake recreations.

Fighting an Evolving Threat Together

The constant evolution of technology along with the complexity of payments fraud has changed the way that financial institutions need to approach prevention. Scammers will target the weakest link in your defense to commit fraud – your members. With deepfakes able to deceive even individuals who are educated on scam tactics, it is more important than ever to effectively prevent the fraudulent payment itself.

A consortium approach harnesses the collective power of the industry to stop fraud. Consortium analytics examine massive amounts of data in a secure cloud environment, providing insights into hundreds of millions of counterparties, and considers the history of legitimate activity for entities involved in a wire, ACH or instant payment. This approach allows financial institutions to identify low-and high-risk transactions, and interdict to stop payments before the funds leave their institution. When strengthened with cross-channel analytics that consider member activity across multiple payment rails, your institution can shut down suspicious transfers with confidence.

Preparing for the Future

Rapid advancements in artificial intelligence have set in motion a frenetic pace of innovation for years ahead. It is critical that financial institutions work together to stay ahead of evolving fraud as deepfakes and other technologies embolden its perpetrators. By embracing collaborative approaches such as consortium analytics, the industry will collectively benefit from stronger prevention today and tomorrow.

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About Nasdaq Verafin

Nasdaq Verafin is the industry leader in enterprise financial crime management, providing a cloud-based, secure software platform for fraud detection and management, BSA/AML compliance and management, high-risk customer management and information sharing. More than 1,200 credit unions use Nasdaq Verafin to effectively fight financial crime and comply with regulations. Leveraging its unique big data intelligence, visual storytelling and collaborative investigation capabilities, Nasdaq Verafin reduces false positive alerts, delivers context-rich insights and streamlines BSA/AML compliance processes. Verafin has industry endorsements in 45 states, including the TBA, WBA, FBA, MBA, and CUNA Strategic Services.