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FRM Part II · FRM Exam Part II · The Financial Stability Implications of Artificial Intelligence

A treasurer receives a video call that appears to show the CFO instructing an urgent wire transfer to a new counterparty. The voice and face are later found to be AI-generated. Which control would most directly address this type of attack?

Independent out-of-band verification combined with dual authorisation is the most direct control. Deepfakes defeat trust in a single audio or video channel, so confirming the instruction through a separate trusted channel and requiring a second approver prevents a fraudulent transfer from being executed.

  1. AIncreasing the bank's VaR confidence level from 95% to 99%
  2. BRequiring independent out-of-band verification and dual authorisation for non-standard payment instructionsCorrect
  3. CAdding more input variables to the credit scoring model
  4. DExtending the data retention period for trading records

Explanation

Deepfake-enabled impersonation exploits trust in a single channel. Out-of-band callback verification and dual approval break the attack chain. VaR, credit scoring and record retention do not address payment authorisation fraud.

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