Reported by Rebecca Ungarino

(Excerpt show below. To read full report, go to: https://www.barrons.com/articles/openai-ceo-sam-altman-bank-fraud-crisis-57be8709)

OpenAI Chief Executive Sam Altman said he is concerned that financial firms aren’t adequately dealing with a rise in artificial intelligence-enabled scams against bank customers, highlighting a chief concern of lenders as the emerging technology grows more sophisticated.

“I am very nervous about this,” Altman told a packed room of bank executives and regulators on Tuesday during a conference held by the Federal Reserve in Washington, D.C.

“A thing that terrifies me is, apparently, there are still some financial institutions that will accept a voice print as authentication,” he said. “For you to move a lot of money, or do something else, you say a challenge phrase, and they just do it. That is a crazy thing to still be doing.”

AI has “fully defeated that,” Altman said in an onstage interview with Michelle Bowman, the Fed’s top banking regulator as its recently confirmed vice chair for supervision. AI has “fully defeated most of the ways that people authenticate currently, other than passwords,” he said.

“But all of these fancy, you know—take a selfie and wave, or hear your voice, or whatever, I am very nervous that we have an impending—a significant impending fraud crisis because of this,” he said.

On Tuesday, Altman said the spread of financial fraud attempts through voice calls—impersonating a person’s child or parent requesting money, for instance—could take on new forms.

“Right now, it’s a voice call. Soon, it’s going to be a video FaceTime and be indistinguishable from reality,” he said, adding that it is important for people to learn how to authenticate requests and avoid schemes.