Despite the notable advancements of artificial intelligence (AI) in the finance and trading sectors, there comes a suite of potential risks, including the increasingly prevalent issue of hard-to-detect deepfakes.
In its 2024 edition of Mastercard Signals, Mastercard delves into the emerging technological trends expected to redefine commerce in the next three to five years. The report underscores how the convergence of AI, computational power, and data technology is fostering innovation across various domains, notably finance and retail trading.
A focal point of the report is the emergence of generative AI assistants, referred to as “personal copilots.”
These sophisticated digital aids, powered by natural language processing and machine learning, stand to revolutionize the workflows of financial professionals. AI copilots could furnish traders with tailored market insights, risk evaluations, and even automate certain trading strategies.
“In finance, both bank trainees and retail investors could use gen AI-created environments to practice complex trading functions,” Mastercard noted in its report, envisioning scenarios where service industry novices interact with AI-generated avatars.
Such AI assistants hold the promise of assisting traders in making informed decisions and optimizing their investment portfolios through the utilization of extensive financial data and real-time market intelligence.
Another noteworthy AI trend with profound implications for finance is the integration of artificial intelligence into software development processes. AI-powered tools can aid developers in coding, software architecture design, and application testing, potentially leading to the creation of more sophisticated financial software and trading platforms, streamlining access to advanced analytics and intricate trading strategies.
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The Risks of AI-Generated Deepfakes in Trading
Despite the opportunities AI offers the finance industry, it also introduces certain risks, one of which is the proliferation of AI-generated deepfakes. Deepfakes represent convincingly realistic media content, such as videos or images, crafted using AI to deceive or manipulate viewers.
“46% of businesses have experienced identity fraud attempts utilizing deepfakes,” Mastercard disclosed. “37% encountered deepfake voice fraud, while 29% were targeted by deepfake videos. The deepfake detection market is projected to witness a 42% annual growth rate through 2026.”
For retail traders, deepfakes pose a significant concern. Malicious actors could employ deepfakes to disseminate false information about companies or markets, potentially leading to market manipulation and financial harm to unsuspecting investors.
