AI in Fintech: A Double Solution for Cybersecurity
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Artificial intelligence (AI) is revolutionizing the fintech and financial services sectors, creating both opportunities and challenges in cybersecurity, according to the FinTech Magazine. Phil Beckett and Richard Grint from Alvarez & Marsal discuss the implications of AI for cybersecurity in financial services.
Phil Beckett, Managing Director and Leader of Alvarez & Marsal’s EMEA Disputes and Investigations practice, emphasizes the ongoing battle between cyber attackers and defenders. He notes, “It is essential that fintechs are abreast of the latest challenges and the solutions that are available to ensure that they are best able to protect both their customers and their business.” Beckett highlights the rapid advancement of deepfakes and the potential impact of generative AI, stressing that there is no «silver bullet» solution. He adds, “Improving awareness, research, and knowledge to ensure that practices, procedures, and technologies are implemented to improve protection” is crucial, with a special focus on training and awareness.
Richard Grint, Managing Director of Alvarez & Marsal’s Disputes and Investigations in London, discusses the necessity of educating customers about fraud risks. He explains, “Historically, customer education was a neglected element of traditional fraud control frameworks. The emergence of new fraud typologies (particularly more sophisticated APP fraud) has led to a change in mindset in recent years.” Grint emphasizes that robust authentication controls and comprehensive fraud prevention measures are essential for financial institutions to stay ahead.
Beckett highlights the role of blockchain and distributed ledger technology (DLT) in maintaining secure transaction records. He states, “Blockchain and DLTs are very powerful and useful technologies that sometimes get a bad reputation because everyone associates them with cryptocurrencies and their associated risks. However, the underlying technology is very useful in maintaining records of fact due to the distributed nature of the technology – there is no single point to attack.” Despite their advantages, Beckett warns that blockchain and DLT should be part of a broader cybersecurity strategy, as they are not a standalone solution.
AI’s dual role in fintech cybersecurity underscores the need for continuous innovation and vigilance. Financial institutions must stay ahead of evolving threats by integrating advanced technologies and comprehensive education strategies for both businesses and customers.