In a stark warning to banking executives, Michael Marcotte, co-founder of the National Cybersecurity Center (NCC), has highlighted biometric-based fraud as the paramount threat facing financial service providers. As cyberattacks on banks escalate, perpetrators are increasingly leveraging deepfakes and generative AI to breach security measures.
These attacks, which often target video-based Know Your Customer (KYC) procedures, have seen a staggering 40% surge in presentation or liveness attacks this year alone. Consequently, synthetic identity fraud has emerged as the fastest-growing category of financial crime in the US, with banks bearing a hefty cost of up to $6 billion.
Speaking after the RSA cybersecurity conference, Marcotte, also CEO of artius.iD, emphasized the urgent need for the cybersecurity industry to prioritize banking security. He underscored the inadequacy of current KYC processes, which rely on outdated methods like ID card, face, and address verification, against the sophistication of deepfakes and AI-driven fraud.
Marcotte cautioned that even a 10-year-old with access to AI tools could produce convincing deepfakes or fake licenses within minutes, posing a significant threat in the wrong hands.
Identity verification platform Sumsub reported a tenfold increase in detected deepfakes worldwide from 2022 to 2023, indicating the rapid evolution of fraudulent techniques. Marcotte urged banks to adopt decentralized storage solutions for KYC data to mitigate risks and avoid potential litigation stemming from fraudulent activities.
Highlighting the broader societal implications, Marcotte stressed that banking executives must recognize the seismic shift in the security landscape. Failure to adapt could result in reduced returns for shareholders, erosion of trust from consumers and corporations, and potentially catastrophic reputational damage.
It is in such an ever-changing world that old methods of KYC appear to be inefficient and outdated. Therefore, banking officials should not only hear but also take the warning from Marcotte into consideration and develop effective security measures which could prevent fraud in biometrics and save the banks and the global economy.
