102 FEATURE seem noticed off? too Something Microsoft’s Chris Knox and Tyler Pichach explain how AI is enhancing regulatory compliance and enabling greater insight into risk management by empowering workers to confront the growing global risk of financial crime BY ALICE CHAMBERS Heather thought she was being cautious. When a helpful bank employee called to warn her of suspicious account activity, she listened carefully. As the caller shared details about her local branch and responded to her concerns with authority, Heather became reassured. What she didn’t realise was that this helpful bank employee was in fact a fraudster – someone trained in manipulation and using social engineering tactics to gather her personal data and even record her voice. Before long, they had everything they needed to impersonate her and initiate unauthorised transactions. Heather’s story is one of countless examples of fraudsters accessing personal information and a sobering reminder of how exposed both individuals and institutions are to deception and financial harm. In today’s hyper-connected digital world, cybercriminals are using advanced tools to exploit gaps in security and regulation. There are many other types of scams targeting individuals and businesses alike. Fraud can scale dramatically, such as AI-generated deepfakes impersonating your boss on a video call to trick you into authorising multimillion-dollar company transactions. “The ready availability of new generative AI tools can make deepfake videos, fictitious voices, and fictitious documents easily and cheaply available to bad actors,” writes Deloitte in its FSI Predictions 2024 report. “For audio deepfakes alone, the technology industry is behind in developing tools to identify fake content.” However, the financial services industry isn’t standing still. It too is turning to AI-powered technologies to enhance compliance and risk management, and empower their teams to detect and prevent fraud before it can cause harm. “AI enhances fraud detection by analysing vast amounts of transaction data to spot suspicious patterns, reducing financial crime risks,” says Chris Knox, director of worldwide financial services at Microsoft. “Automation powered by AI streamlines compliance processes, ensuring continuous monitoring of regulatory requirements and minimising human error. In AI
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