As the world races to catch up with the promise of artificial intelligence, the nation’s financial institutions have found themselves facing an expanding universe of possibility and fraud.
Over the past few years, the rates of AI-enhanced fraud have risen exponentially, with the Federal Trade Commission estimating that Americans alone lost over $108 million in 2024 to AI fraud. The most predominant methods utilized include investment-related scams, imposter scams, and business and job opportunity scams.
In response, the banking industry has sprinted to catch up, doing what they can to keep modern technology from turning new-fangled innovation into old-fashioned highway robbery.
“In the past, criminal activity often involved physical theft — stolen checkbooks, intercepted mail, or compromised debit and credit cards,” noted Rachel Nunez, VP and senior commercial relationship manager at Home Bank. “Today, fraudsters can also operate in the digital shadows, leveraging increasingly sophisticated tactics to exploit consumers and businesses alike. At Home Bank, we take a proactive approach to fraud prevention by educating our customers on how to recognize and avoid scams.”
Many scams today use simple information-based schemes — for example, pretending to be your bank looking for a social security number — while others are more insidious, maybe using generative AI to fake a loved one being held hostage. It’s very possible that you or someone you love has or will be contacted by one of these scammers due in part to the wide accessibility of the underlying technology at play.
“The barriers to entry have become much lower than ever for fraudsters utilizing AI,” said Jason Shields, chief operating officer of Gulf Coast Bank. “The most common method is spoofing the bank or website. These are low success rate efforts that, given enough targets, can cause a lot of damage.”
While banks are largely advising their clients on well-worn safeguarding practices to use day to day like never clicking on suspicious links and warning customers to be wary of anyone calling to ask for intimate information like PINs or passwords, many national and regional institutions, like Gulf Coast Bank, are beginning to fight fire with fire by using AI’s brute force computing power to tackle fraud head on.
“With fraud this complicated, the only way to truly combat it is to have systems that analyze things in a faster, granular fashion,” said Shields. “There’s absolutely no way we could manually catch these things. But even as we have deployed AI to catch these bad actors as quickly as possible, it’s important that we keep the implementation as a tool and remain aligned with our core values of personal service.”
The FTC estimates consumers aged 30 to 39 are at the highest risk of falling victim, while consumers aged 70 to 79 lose the most money. Contacting your financial institution before giving over sensitive information or any dollar amount is crucial to avoiding these highly specialized schemes, as banks across the nation are beginning to refit their existing accounts and services to better flag potential fraud before it even happens.
“Historically, cybercriminals tend to target the most vulnerable businesses,” noted Jeff Ehlinger, BankPlus executive VP and Louisiana president. “By investing in preventative technologies and actively managing cyber risks, businesses can reduce their appeal as targets and improve their resilience against attacks. At BankPlus, we partner with some of the nation’s most advanced fraud prevention firms to continually evolve our technologies to stay ahead of increasingly sophisticated threats.”
AI has been and continues to be integrated into every aspect of our lives, from refrigerators to interpersonal relationships. Fraud has always been an early adopter of innovative technologies, and banking institutions around the world are doing what they can to play defense.
Jeremy Marshall was born and raised in Baton Rouge before moving to New Orleans with his wife, Kristin, in 2018. Beginning his career in the film/TV industry, Marshall worked steadily on over a dozen projects before transitioning to Renaissance Publishing as sponsored content coordinator. He may be reached via email at jeremy@myneworleans.com.
