Deepfakes – replicating a person’s entire identity through artificial intelligence (AI) – are on the rise, a Federal Reserve Board governor said Thursday, but he said the phony IDs can be challenged by regulators with updated guidance and rules.
Speaking at the Federal Reserve Bank of New York, Fed Gov. Michael Barr said any rules regulators adopt to deal with deepfakes should be mindful of the impact on smaller institutions. He said those rules should be “right-sized” for risk.
“In addition, we can work with core providers to understand the extent to which they are incorporating AI advancements in their products and services to help smaller banks defend against deepfakes and other emerging risks from the technology,” Barr said.
“Last, we can also highlight research and development for cybersecurity startups and research into tools to combat deepfakes and Gen AI-based fraud,” he said.
Barr also urged regulators to consider using AI technologies themselves. He said that includes enhancing regulator ability to monitor and detect patterns of fraudulent activity at regulated institutions in real time. “This could help provide early warnings to affected institutions and broader industry participants, as well as to protect our own systems,” he said.
Fed Board Gov. Michael S. Barr: Deepfakes and the AI Arms Race in Bank Cybersecurity
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