In a recent British study, it was highlighted that artificial intelligence-generated fake news on social media is increasing the likelihood of bank runs. The study suggests that banks need to enhance monitoring to detect disinformation affecting customer behavior.
Generative AI can fabricate news suggesting that customer funds are at risk, or create memes addressing security concerns, disseminated through social media with paid advertisements. Concerns over bank runs have escalated post the 2023 Silicon Valley Bank collapse, where $42 billion was withdrawn in 24 hours.
The G20's Financial Stability Board cautioned last November that generative AI "could enable malicious actors to generate and spread disinformation causing crises" like flash crashes and bank runs.
An experiment by Say No to Disinfo revealed that after viewing AI-generated content, 33% of UK bank customers were "extremely likely" to move their funds, with an additional 27% being "somewhat likely."
The study indicated that for every £10 spent on social media ads to amplify fake content, up to £1 million in customer deposits could be transferred. Banks are advised to incorporate media and social media monitoring with withdrawal surveillance to identify the impact of misinformation on customer behavior.
Revolut's head of financial crime, Woody Malouf, emphasized the need for real-time threat monitoring, while stressing the importance of social media platforms in prevention.
Industry body UK Finance acknowledges banks' efforts in mitigating AI-related risks, although regulators remain vigilant about the technology's broader implications on financial stability.
Regrettably, Reuters' inquiries to other financial institutions like NatWest and Barclays concerning this matter went unanswered.
Importantly, the report's publication coincided with an AI Summit in France focused on issues distinct from previous summits, signaling a notable shift in focus.
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