Federal Reserve Governor Michael Barr is urging banks to begin collecting behavioral and biometric data from customers to combat deepfake digital content created through ID. These deepfakes are capable of replicating a person’s identity, which “has the potential to supercharge identity fraud,” Barr warned.
“In the past, a skilled forger could pass a bad check by replicating a person’s signature. Now, advances in AI can do much more damage by replicating a person’s entire identity,” Barr said of deepfakes, which have the “potential to supercharge identity fraud.”
“[We] should take steps to lessen the impact of attacks by making successful breaches less likely, while making each attack more resource-intensive for the attacker,” Barr insists, believing that regulators should implement their own AI tools to “enhance our ability to monitor and detect patterns of fraudulent activity at regulated institutions in real time,” he said. This could help provide early warnings to affected institutions and broader industry participants, as well as to protect our own systems.”
Enabling multi-factor authentication and monitoring abnormal payments is a first step, but Barr and others believe that banks must begin to collect their customer’s biometric data. “To the extent deepfakes increase, bank identity verification processes should evolve in kind to include AI-powered advances such as facial recognition, voice analysis, and behavioral biometrics to detect potential deepfakes,” Barr noted.
Barr would like banks to begin sharing data to combat fraud. Deepfake attacks have been on the rise, with one in 10 companies reporting an attack according to a 2024 Business.com survey. Yet, will our data be safer in the hands of regulators?
The Office of the Comptroller of the Currency (OCC) fell victim to a cyber attack after discovering that hackers had been accessing their emails for over a year. Hackers found their way into an admin account, permitting them to access internal communications of over 100 banking regulators. Former Treasury Secretary Janet Yellen had her own computer hacked by Chinese state-sponsored actors who used a third-party vendor to access sensitive, unclassified documents.
Regulators have been unable to protect themselves, but they believe that they can protect us if we continue to share our valuable data. All freedoms are relinquished in the name of protection.
