Banks Advised To Include AI In Risk Management Strategies
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An announcement from the United States Treasury has advised banks to strengthen their risk management practices to prevent being engulfed by AI-driven cybercriminals and fraudsters.
The report, which was called for by an executive order by Joe Biden last year, questioned 42 bank executives regarding their cybersecurity issues.
It discovered that the advancements in AI and the rise of AI-generated videos are an escalating concern for banks in the US.
The Reports Recommend More Partnerships Between Banks
The report states that the financial industry is increasingly affected by costly cyber-enabled fraud and cybersecurity threats. As access to innovative tools increases, it’s possible that, at least initially, cyber threat actors using advanced AI programs will gain the upper hand by outnumbering and outpacing their targets.
The report arrives amidst an alarming increase in consumer dissatisfaction. The FBI’s Fraud Complaint Centre received over 880,000 reports of cybercrime incidents last year, a 22% rise from the preceding year.
Apart from advising banks to improve their risk management practice to align with enhancements in AI, the report also suggests more partnerships among banks and increased data sharing.
It also advises regulators to be more flexible in their law-making. This would not only fortify securities against fraud, but it would also assist in promoting the rapid adoption of AI tools that comply with more solid risk management standard procedures.
The report also reveals that a balanced regulatory system is very important in the financial sector. It enables institutes to harness the full potential of AI in fighting advanced threats, without being delayed by excessively restrictive oversight.
The Biden Administration Wants To Use AI To Combat Against Frauds
Nellie Liang, undersecretary for domestic finance stated that AI is transforming fraud and cybersecurity in the financial services industry. The Biden administration is dedicated to collaborating with financial organizations to use advanced technology while protecting against risks to financial stability and operational resiliency.
The Treasury Department is the government institution that ensures financial security and promotes economic prosperity in the United States. The organization carries out a wide variety of activities like fostering enhanced governance in financial institutions, ensuring sustainable economic development, and advising the President on financial and economic issues.
The department maintains and operates systems that are vital to the country’s financial infrastructure like the borrowing of funds required to run the federal government, the production of currency and coin, the allocation of payments to the US citizens, and revenue collection.
