How Cybercriminals Are Exploiting AI in the Financial Services Industry

Artificial intelligence (AI) is revolutionizing the way the financial services industry works, communicates, and solves problems. From accelerating decision-making with data-driven insights to generating sophisticated content and code in seconds, AI’s benefits are only limited by our imagination. With the ability to reduce errors, eliminate repetitive tasks, and provide around-the-clock support, AI is being heralded as a transformative force across industries.

Like any powerful tool, AI can be misused, and cybercriminals are already finding ways to weaponize it. As the financial services industry embraces AI for innovation and efficiency, malicious actors are leveraging the same technology to bypass security systems, deceive individuals, and conduct cyberattacks with unprecedented speed and precision.

Here are some of the most pressing concerns regarding how AI is empowering cybercriminals and endangering digital security within financial services companies:

External Threats

1. Sophisticated Fraud and Synthetic Identity Creation

   AI can generate synthetic identities with realistic credit histories, government IDs, and utility bills to open fraudulent accounts or apply for loans. Automated bots test stolen credentials across multiple banking platforms (credential stuffing) at massive scale, avoiding AI fraud detection with AI-generated human-like behavior.

2. AI-Powered Phishing and Business Email Compromise (BEC)

   Generative AI (gen AI) can produce flawless, localized, and highly personalized phishing messages (also known as vishing) that mimic internal executives, regulators, or major clients. How is voice cloning used by cybercriminals? Voice cloning can be used to authorize fraudulent transactions in calls to treasury or payment teams. BEC attacks focus on tricking victims into exposing sensitive company information or access to systems by impersonating company executives or vendors. While detection in both vishing and BEC attacks is difficult, be alert to subtle inconsistencies. Victims should consider reporting incidents to law enforcement, engaging legal counsel, and notifying platform administrators.

3. AI-Driven Automated Reconnaissance & Exploitation

   AI can continuously scan bank networks, ATMs, payment processors, and fintech APIs for vulnerabilities faster than traditional penetration testers. Once weaknesses are found, automated scripts deploy targeted malware or manipulate transaction processing systems in real time.

4. Adversarial Attacks on AI Fraud Detection Systems

   Many banks use AI for fraud detection, anti–money laundering (AML) compliance, and transaction monitoring. Attackers can train adversarial inputs to “poison” these models or subtly modify transaction patterns to avoid being flagged

End User Threats

1. Unintentional Exposure of Sensitive Data

   Users may unknowingly upload sensitive or proprietary information into AI chatbots, unaware that this data could be stored or exposed through future system vulnerabilities. Organizations should establish clear usage policies for AI tools, restricting access to trained personnel and enforcing safeguards for handling confidential information.

2. AI Chatbot Data Breaches

   Even AI platforms themselves are not immune to attacks. OpenAI, for instance, disclosed a data leak caused by a bug in its source code. Such incidents can expose not only user credentials but also the queries and data shared with the chatbot. Financial services companies should consider the potential consequences of your input being publicly accessible. Avoid sharing any confidential, proprietary, or personally identifiable information through AI tools unless you are certain of their security protocols.

Balancing Promise with Precaution

AI is undeniably one of the most powerful technologies of our time. As it continues to transform the financial services industry, it also presents new challenges and risks. Cybercriminals are exploiting AI to carry out sophisticated attacks, posing significant threats to financial institutions and their clients. Financial services companies must invest in robust AI cybersecurity measures and enhance ongoing awareness training to protect themselves. By remaining vigilant and proactive, financial institutions can leverage the benefits of AI while minimizing the risks associated with AI-driven cyberattacks.

For more information on the risks of artificial intelligence in the financial services industry and keeping your business safe and secure, contact Kevin Ricci at kricci@citrincooperman.com.