AI's Dark Underbelly: Deepfakes Menace India's Finance Sector

Published Date: 1/09/2024

Deepfakes are blurring the line between reality and imagination, posing a significant threat to India's financial sector. Experts weigh in on the consequences and potential solutions.

Artificial Intelligence has evolved at a rapid pace, but one of its more chaotic offerings is the deepfake. A deepfake refers to the process of using AI to produce or modify movies, images, or audio to seem real but are actually altered or synthesized.

The consequences of deepfakes can be catastrophic for the Financial Services Industry (FSI) sector, which is built on trust and reputation. In 2022, a viral deepfake audio of a CEO declaring a massive price hike temporarily tanked the company's stock due to shareholders' panic.

The 'Mistrust' factor is a significant concern in the FSI sector. Zerodha CEO Nikhil Kamath shared a deepfake video of himself, highlighting that even the most rational among us could be fooled. He pointed out that as deepfakes improve, it will become harder to validate if the person on the other side is real or AI-generated.

Vamsi Ithamraju, CTO, Axis Mutual Fund, reiterated that a deep fake impersonating a business leader could have serious consequences on the economy. These scenarios have a disturbing impact on citizens, especially in a country like India where high-speed internet and communication apps allow photos and videos to be shared within seconds with little verification.

Public faith in technologies cannot be established without valid foundation. It needs systems of governance and monitoring to keep up the same slick pace as technology. CIOs are unanimous in their opinion that strongly enabled government bodies are the way forward in ensuring that deepfakes can stay in the public domain without harming organizations, reputation, and economy.

Jyothirlatha B, CTO, Godrej Capital, suggested that governments may need to establish regulatory bodies to oversee the ethical use of AI and enforce compliance, while public awareness campaigns will educate individuals about the risks of deepfakes. Khushbu Jain, Technology Law expert and Partner, Ark Legal, posited that addressing the risks posed by deepfakes requires a multi-pronged regulatory approach, as well as public awareness spearheaded by multi-stakeholder collaboration.

CIOs are very cognizant of the ethical conundrums posed by deepfakes. KV Dipu, Senior President, Bajaj Alliance General Insurance, referenced McKinsey's report that highlights that while AI can increase operational efficiency by up to 30%, it also introduces significant ethical challenges related to data privacy, algorithmic bias, and transparency.

Ajay Poddar, CTO, HDFC Retirement Tech, firmly believes that with great power comes great responsibility. To avoid reputational damage and legal issues, organizations should consider ethical implications while working on AI innovation. He categorizes his strategy as such  Ethical Guidelines & Transparency, Risk Mitigation & Assessment, and Human Oversight/Accountability.

The finance sector is particularly unarmored because it gets targeted for two assets – data and money. Scamming people instead of breaking firewalls – targeting their feelings of confusion and fear has proved lucrative for scammers. These tactics also make it harder to trace the culprits behind deepfake attacks.

Ultimately, all CIOs are in agreement that the strongest pillar in building a deepfake defense is awareness in the common public, which requires media literacy. The distribution of information, images, and video has changed irreversibly, and the channels and platforms no longer have the same centricity and monitoring of yesterdays.

FAQS:

Q: What is a deepfake?

A: A deepfake refers to the process of using AI to produce or modify movies, images, or audio to seem real but are actually altered or synthesized.

Q: How can deepfakes affect the Financial Services Industry?

A: Deepfakes can erode trust built over decades in a single moment, causing catastrophic consequences for the FSI sector.

Q: What is the role of government bodies in regulating deepfakes?

A: Strongly enabled government bodies are necessary to ensure that deepfakes can stay in the public domain without harming organizations, reputation, and economy.

Q: How can organizations protect themselves from deepfake attacks?

A: Organizations should consider ethical implications while working on AI innovation, implement risk mitigation and assessment strategies, and ensure human oversight and accountability.

Q: What is the importance of media literacy in building a deepfake defense?

A: Media literacy is crucial in building a deepfake defense, as it requires awareness in the common public to identify and report deepfake content.

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