Reported by Parya Lotfi

Financial crime is evolving at a pace that regulators and compliance teams are struggling to match. While most financial institutions have invested heavily in fraud prevention, a new and insidious threat is slipping through the cracks—deepfake-generated synthetic identities.

Fraudsters no longer need stolen documents or hacked credentials; they can now fabricate entirely realistic personas that pass biometric authentication, clear “know your customer” (KYC) checks and gain full access to financial systems.

And they are doing so at scale. In 2023 alone, deepfake-related fraud attempts increased 700% in fintech—a staggering indicator of how criminals are weaponizing AI-powered deception.

Unlike traditional fraud, deepfakes introduce a fundamental identity risk problem for financial institutions. Today, a deepfake-generated selfie can pass liveness detection, a manipulated video can fool facial recognition and a synthetic voice can impersonate a CEO or compliance officer. The result? Unauthorized accounts, fraudulent transactions and systemic vulnerabilities that compliance frameworks were never designed to handle.

Read full report: https://www.forbes.com/councils/forbestechcouncil/2025/04/17/face-off-how-deepfake-identities-are-rewriting-the-rules-of-financial-crime-and-why-compliance-must-catch-up/