Deepfakes, Bias No Excuse to Skip AI Benefit, Finance Firms Told

A bank uses biased artificial intelligence outputs in a mortgage lending decision. An insurance firm’s AI produces racially homogeneous advertising images. Users of an AI system complain about a bad experience.

These are just a few of the potential risks AI poses for financial institutions that want to embrace the emerging technology, according to a series of papers released on Thursday. The papers, by FS-ISAC, a nonprofit that shares cyber intelligence among financial institutions around the world, highlights additional pitfalls as well, including deepfakes and “hallucinations,” when large language models provide incorrect information presented as facts.

Despite those risks, ...