Amid the rapid development of generative artificial intelligence (GenAI), financial institutions and enterprises should bolster their defence systems against online fraud.

GenAI's ability to create highly convincing fake audio and visual content has made the process of identity verification more complex, giving cybercriminals a new, more frightening weapon for exacting financial losses from their victims.

According to a recent report by the Cyber Security Agency of Singapore, malicious actors are already using GenAI to perpetrate deepfake scams that can bypass biometric authentication and detect vulnerabilities in software.

Since last year, GenAI tools such as ChatGPT and Google Gemini have spread rapidly across countries, with minimal restrictions, if any, on their use. Fortunately, according to the latest report on data breaches by US mobile network operator Verizon, there is little evidence that cybercriminals are already using GenAI to carry out attacks at scale.

Nonetheless, it is highly likely that threat actors are exploring GenAI’s capabilities, honing their skills in the use of the technology, and developing bots to pursue their nefarious activities.

Rapid advances in the technology may soon enable them to exploit GenAI's potential to craft malware more swiftly or increase the frequency and effectiveness of their phishing attacks.

The 2024 Verizon Data Breach Investigations Report expects the expanding use of AI will likely increase the volume of cyberattacks next year. More frequent attacks may also have a greater impact. According to the report, 77% of survey respondents think that AI-assisted attacks like deepfakes and SMS phishing are likely to succeed and 88% believe that AI-assisted cybersecurity solutions will become increasingly important in the future.

All kinds of threat actors, from sophisticated nation-states and well-funded criminal groups to individual hackers, will eventually adopt AI. Generative AI can create highly convincing phishing emails and messages that mimic legitimate communications, making it difficult for recipients to detect fraud, according to Lucinity, an Iceland-based AI software-as-a-service provider.

As such, organizations should increase their defences against the next generation of cyber threats. Deepfakes and SMS phishing are likely to form the first wave of these AI-enabled attacks.