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Countering Fake News and Deep Fakes in Financial Services

Social media and Artificial Intelligence (AI) have transformed the world’s information churn, bringing with it the increased threat of misinformation, fake news and deep fakes. What does this mean for financial services, and can thought leadership help counter the misinformation menace?

We’ll be guided through our journey by our truth-seeking superhero, The Defender, who eats rumours for breakfast, smears for lunch and devours lies before it gets dark. The Defender will argue that thought leadership is vital to the financial sector’s fight against misinformation, fake news and deep fakes. They will begin with telling a true story.

On 22nd May 2023, a photo of black smoke coming from a government building near the Pentagon in the US appeared on Facebook, and then spread to accounts like ZeroHedge and RT on Twitter. A stock market plunge followed as investors panicked.

The photo was an AI-generated fake.

The image was quickly debunked and removed from social media. But it did reveal the threat of deep fakes to the financial sector, on which the smooth running of the world’s economy depends.

That new technologies should bring disruption is nothing new. The birth of the radio saw populists like the Reverend Charles E. Coughlin acquiring political influence through his radio show in the 1930s, where he increasingly broadcast anti-Semitic falsehoods.

But it is the reach and speed of misinformation spread and its deployment by cyber criminals and even governments that accounts for its destructive impact today.

Misinformation in financial services

Misinformation doesn’t just increase the likelihood of setting off a stock market panic, though that may become all too common with AI. It has a range of impacts on consumers and businesses. For example:

  • Scams: fraudulent investment schemes, phishing, vishing, pension scams, loan fee fraud, identity theft, impersonation and so on. These scams are aided by ever-more sophisticated voice cloning (for example, with Re-speecher, Murf, Speechify and Listnr.tech) and image manipulation.
  • Financial markets: stock market panics, manipulation of stock pricing, false accounting to lift stock value.
  • Bank closures: The failure of Silicon Valley Bank is a case in point, where malicious actors further undermined a struggling bank, eventually leading to its closure and creating opportunities for scammers.
  • Public relations crises generated by fake news – for example, a hoax message in WhatsApp revealing Metro Bank was about to close in 2019 caused a mass withdrawal of deposits and a fall of 9% in share prices.
  • AI hallucinations: careless use of AI in the sector for analysis, report writing and asset selection (not fact-checking, for example) can lead to the spread of misinformation.

Failure to tackle these risks by financial institutions leads to widespread reputational risks and a loss of trust.

In 2021, we published a report on misinformation based on interviews with 1000 consumers and 600 business leaders. We found that 21% of consumers had been victims of a financial scam based on fake news, while 28% said they may have. The figures saying they had definitely been victims were higher in India (46%) and China (40%).

70% thought they could fall victim to a scam, indicating that consumers feel the threat persists. However, 91% of financial services businesses surveyed felt they were doing well at combatting misinformation (57% said fairly well and 34% said very well), higher than the average of 88%. Does this indicate a perception gap between businesses and consumers? (Source: Mitigating the Risks of Misinformation).

Combatting misinformation

A Columbia University Capstone Team report explored deep fake risks to the financial sector. They argue that the key to combatting fraud and disruption caused by misinformation and deep fakes was, in their view, technological and educative:

  • Multi-factor authentication
  • Content provenance and authenticity
  • New detection tech
  • Employee training
  • Enhanced PR collaboration to detect and manage threats
  • Media literacy
  • Encourage corporate responsibility in AI providers

Education and communication vital to combat misinformation

Technology and educating staff are important. But so is communication. In our report, Mitigating the risks of misinformation, we identified the five corporate pillars around which companies could centre action:

Thought leadership is intrinsic to all of these. It shapes policy and governance by advocating for best practice. It creates communications that are data-rich but well-communicated. It promotes authentic brand messaging. It can shape how organisations work if staff engage with this content. And in doing all this, thought leadership helps to build and restore trust.

Thought leadership can explain trends to consumers and encourage critical thinking in the sector.

Communicating with customers effectively

In our research on thought leadership in the financial sector, 88% of those who engage with thought leadership said that as part of a broader strategy, it was an effective way of combatting misinformation. The majority (57%) of those that create and digest thought leadership most trust research-led content. 31% of creators and 24% of digesters of thought leadership most trust published articles.

It can also help to transform the industry by restoring standards, discouraging risky behaviours and changing investment practices

Strategic implications

Thought leadership really does have an impact on strategy and customer decision-making in business-to-business (B2B) operations. 51% of financial services thought leadership digesters – those business leaders that actively engage with thought leadership – said it led their decision-making, and 45% said it helped inform it. 

Learn about thought leadership’s power to restore trust in the financial sector by downloading our report today.

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