Reducing the Risk of AI-Driven Account Takeover Fraud

Artificial intelligence (AI) is revolutionizing the financial industry, among countless other areas of life. But it’s also giving fraudsters new tools to exploit individuals and institutions. Increasingly, criminals are using generative AI (gen AI) to commit a wide range of financial scams – from identity theft and account takeovers to investment fraud and payment fraud.

Approximately 25% of Americans have been victimized by account takeovers (source: Security.org). It’s important to understand where the risks lie so you can educate your employers and participants against increasing threats.

How fraudsters are using gen AI to gain access to participant accounts

Gen AI can create realistic content, including text, images, audio and video, based on user prompts. While this technology has many legitimate and beneficial uses, bad actors are leveraging its capabilities to bypass security measures and deceive individuals and businesses.

“AI has countless benefits, including the ability to increase efficiency and accuracy. But we have to be aware of the risks that exist if used with malicious intent. This is why education is so important for our partners, participants and internal teams.” – Dirk Emde, Alegeus AI Program Office Manager

Fraudsters are using gen AI to commit account take over fraud in multiple ways, including:

Social engineering scams

AI-enhanced phishing attacks can analyze your social media activity to craft highly personalized messages. These messages are designed to trick account holders into revealing sensitive information or clicking malicious links.

Voice cloning

With just a few seconds of recorded speech, gen AI can create a near-perfect imitation of a voice. Fraudsters can use this to impersonate a loved one or a trusted financial institution to gain access to accounts.

Fake ID documents

AI-generated images and documents make it easier to create convincing and counterfeit identification. These forms of ID can be used to open fraudulent accounts or verify unauthorized transactions.

Protecting yourself, your employers and your members

Participant education is a critical component of reducing fraud risk. Including reminders as a part of regular communication helps participants remain vigilant.

“Fraud mitigation is everyone’s responsibility, but participants are the first and best line of defense against preventing fraudulent activity. This starts with fostering account holder awareness initiatives, stressing the need to be vigilant, and why regular account review is imperative. The bad actors aren’t static, so we cannot be either.” – Dan Draz, Director, Fraud Risk Management

Staying one step ahead

AI-powered fraud is evolving rapidly. Alegeus’ WealthCare Administration (WCA) platform includes multiple layers of protection, including multifactor authentication, brute force login blocking, and required password complexity.

For more information on how to add extra layers of protection for your participants, reach out to your Alegeus Account Executive or contact us today.