A new report from the Financial Services Information Sharing and Analysis Center (FS-ISAC) highlights the growing threat of deepfake technology to financial institutions and outlines a comprehensive framework for understanding and combating these risks.

The report, titled "Deepfakes in the Financial Sector: Understanding the Threats, Managing the Risks," reveals alarming statistics: 1 in 10 companies have already encountered deepfake fraud, while 6 in 10 executives admit their firms lack protocols regarding deepfake risks. With losses from deepfake and AI-generated frauds expected to reach tens of billions of dollars in the coming years, the financial sector stands at a critical juncture.

Understanding the Threat Landscape

The FS-ISAC report introduces a first-of-its-kind Deepfake Taxonomy for the financial sector, categorizing nine distinct threat types across two domains: organizational threats and technology-specific challenges. These range from customer fraud and executive impersonation to sophisticated social engineering schemes and technological vulnerabilities in deepfake detection systems.

The report identifies several critical attack vectors that financial institutions must defend against. Voice impersonation has emerged as a dual threat, targeting both automated authentication systems and human operators who rely on voice verification. Online biometric identity impersonation presents another significant challenge, as fraudsters develop increasingly sophisticated methods to bypass security measures. Social engineering attacks enhanced by deepfake technology have become particularly effective, while information operations using synthetic media threaten institutional reputations. Privacy concerns also loom large, as unauthorized synthetic content creation poses risks to both institutions and their customers.

Building a Multi-Layered Defense

The report emphasizes that no single solution can address the deepfake challenge. Instead, financial institutions must implement a comprehensive strategy that integrates multiple layers of protection. This includes deploying robust multi-factor authentication systems that go beyond single-factor biometrics, implementing advanced liveness detection to identify synthetic content in real-time, and conducting thorough employee training and awareness programs. Additionally, institutions must establish comprehensive fraud reduction processes and develop privacy-preserving controls that include clear consent frameworks for biometric data collection and use.

The Path Forward

Perhaps most crucially, the report highlights that addressing deepfake threats requires collaboration across the financial sector. Individual institutions cannot effectively combat this challenge in isolation — it demands coordinated effort from financial institutions, technology providers, regulatory bodies, and industry groups.

The report serves as both a wake-up call and a roadmap. As financial institutions increasingly rely on digital communications and biometric authentication, the risk surface for deepfake exploitation expands. However, by understanding the threat landscape and implementing appropriate controls, institutions can significantly mitigate these risks.

For financial institutions looking to strengthen their defenses against deepfake threats, the complete FS-ISAC report offers detailed insights, practical frameworks, and specific control recommendations. In an era where trust is increasingly digital, understanding and addressing deepfake risks isn't just about security - it's about preserving the integrity of financial systems themselves.

At Reality Defender, we've seen firsthand how the threats outlined in this report manifest in real-world attacks against financial institutions. Our experience detecting and preventing deepfake-driven fraud aligns with FS-ISAC's findings: the key to protecting against these threats lies in implementing robust detection systems at every level of public content dissemination. By identifying AI-generated disinformation at the outset, platforms and institutions can stay ahead of sophisticated fictions spun by artificial intelligence, helping ensure that financial decisions are based on facts, not fabrications. The FS-ISAC report serves as a crucial reminder that the time to implement these protections is now, before deepfake attacks become even more sophisticated and widespread.

You can access the full report here to learn more about protecting your institution from deepfake threats.