Austin Capital Bank CEO Erik Beguin on AI-driven fraud

Fraud is on the rise, and AI is contributing to both the solution and the problem.  “Fraud is a really large problem and growing exponentially,” Austin Capital Bank Chief Executive Erik Beguintells FinAi News in this episode of “The Buzz” podcast. Consumers reported losing $12.5 billion to fraud in 2024, according to the FTC. And that’s probably understated, Beguin says, noting that not all consumers report being defrauded, due to embarrassment, being in denial or other reasons. Fraudsters are using AI to target individuals, using it to read social profiles and identify the best way to attack a person, he says. This streamlines an extremely laborious task for bad actors. On the other hand, FIs are using AI to boost account security, Beguin says. For example, consumers and financial institutions are likely to start moving away from usernames and passwords and even traditional multifactor authentication methods. Instead, the market should move toward biometrics and AI-driven device and image authentication.