Deepfake technology, a form of synthetic media created using artificial intelligence, is rapidly advancing and making headlines globally – and not for good reasons. This powerful tool can create highly realistic, yet entirely fabricated, images, videos, and audio recordings that are later used for identity fraud and scams. As a business leader, it's imperative to understand the potential dangers of deepfakes and take proactive steps to protect your organization. 

In this article, we’ll lead you through the frequently asked questions about deepfakes, so you can equip yourself with knowledge to combat this threat. 

What are deepfakes? 

Deepfake technology uses deep learning — a sophisticated artificial intelligence (AI) — to create fake images, video, or audio fragments. This way, fraudsters can "make" people say or do things they have not said or done by digitally altering a video of a person. And beware: it is also already used for financial fraud at scale. 

Deepfake content has been historically created by using two algorithms that compete with one another. One is called a generator, and the other is called a discriminator. The generator creates fake digital content and asks the discriminator to find out if the content is real or artificial. Such technology has seen tremendous evolution over the past decade. Currently, it is almost impossible for a human to spot the difference between fake and real face images.  

Technology has evolved so fast over the past couple of years that video and speech generation can now be used to create realistic interactions with minimal source data for training using sophisticated techniques like face swap with super-resolution. 

How can deepfakes impact my business? 

Deepfakes pose a significant challenge to traditional authentication and identity systems. By manipulating images, videos, and audio, fraudsters can create highly realistic, yet entirely fabricated, content. This opens the door for account takeover, as stolen or manipulated data, such as social security numbers, can be used to create synthetic personas that appear legitimate. This puts both customers and businesses at risk.  

Here are the most common threats posed by deepfakes to businesses: 

Account opening fraud

Fraudulent account openings are a common consequence of synthetic fraud. By exploiting vulnerabilities in onboarding processes, fraudsters can establish false identities and gain access to financial services. This can lead to financial institutions unknowingly providing services to criminals. 

Financial losses and eroded trust

Synthetic fraud poses significant financial risks. Fraudsters can build up credit histories using these synthetic identities and then default on loans or credit lines. This can lead to increased credit risk and substantial financial losses for financial institutions. 
Moreover, the prevalence of synthetic fraud can erode user trust. Customers may become concerned about the security of their personal information and financial transactions. KYC systems may generate false positives, flagging legitimate customers as potential fraud risks, leading to customer dissatisfaction and delays in onboarding processes. 

Cross-channel fraud  

Fraudsters often exploit multiple channels to create and use synthetic identities. Cross-channel fraud refers to fraudulent activities that involve multiple channels or touchpoints in a customer's interaction with a business. This can include a combination of online, offline, and mobile channels.  

Regulatory challenges

Deepfakes can be used to gain unauthorized access to sensitive data. With the increasing prevalence of data breaches, many countries have implemented stringent regulations to address this issue. A data breach can not only result in financial losses and reputational damage but also lead to significant regulatory problems. 

How can businesses detect and defend against deepfakes? 

To effectively combat deepfakes, businesses should invest in advanced verification processes, including liveness detection technology. This technology can help distinguish between real, live individuals and manipulated media. 

What are the economic and technological challenges of defending against deepfake technology?  

While investing in deepfake defense can incur upfront costs, the potential consequences of a successful deepfake attack make it a worthwhile investment. Businesses should consider the cost of advanced identity verification solutions in relation to the potential financial and reputational risks they face. 

Conclusion 

Deepfakes present both opportunities and challenges for businesses. By understanding the risks and taking proactive measures, businesses can mitigate the negative impacts of deepfakes and leverage their potential benefits. 

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