FRM Part II · FRM Exam Part II · The Financial Stability Implications of Artificial Intelligence
A treasury officer at a mid-sized bank receives a video call that appears to show the CFO instructing an urgent large wire transfer. The voice and face are later found to be AI-generated. Which control would most directly address this type of AI-enabled fraud?
Out-of-band verification combined with dual authorisation of high-value payments is the most direct control. Deepfakes defeat voice and video recognition, so confirming through an independent channel and requiring a second approver stops a single forged instruction. VaR, credit scoring data and capital buffers do not address payment fraud.
- ARequiring out-of-band verification and dual authorisation for high-value payment instructionsCorrect
- BIncreasing the bank's VaR confidence level from 95% to 99%
- CUsing a larger training dataset for the bank's credit scoring model
- DRaising the bank's countercyclical capital buffer
Explanation
Deepfake impersonation attacks exploit trust in audio and video identity. Out-of-band verification and dual authorisation break the single-channel dependency and are direct process controls. The other options address market risk, model performance or macroprudential capital, which do not mitigate payment fraud.
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