The post Explainability must be the baseline for AI in compliance appeared on BitcoinEthereumNews.com.

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial. Artificial intelligence is supercharging financial crime, and the financial industry’s defenses are falling behind. Criminals now use AI to create convincing deepfakes, craft tailored phishing attacks, and fabricate synthetic identities at scale. These tactics move faster than traditional compliance systems can track, exposing a fatal flaw in current approaches. Despite the scale of this threat, many organizations are rushing to deploy their own AI systems without ensuring those tools are explainable, transparent, or even fully understood. Unless explainability becomes a baseline requirement for any AI system used in financial compliance, we risk replacing one form of opacity with another, which will not build trust with the public or regulators. The arms race has already begun AI is being used to make old crimes faster and cheaper, and facilitating the perpetration of new types of crime. Consider the recent surge in synthetic identity fraud. Cybercriminals use AI to stitch together real and fake data into realistic, fabricated identities. These profiles can open accounts, obtain credit, and bypass verification systems while being almost indistinguishable from genuine users. Deepfake technology has added another weapon to the arsenal. Convincing impersonations of CEOs, regulators, or even family members can now be generated with minimal effort. These videos and audio clips are being used to initiate fraudulent transactions, mislead employees, and trigger internal data leaks. Even phishing has evolved. AI-driven natural language tools can craft hyper-personalized, grammatically correct messages tailored to each target based on their public data, online behavior, and social context. These aren’t the misspelled spam messages of the past. They’re bespoke attacks designed to earn trust and extract value. In the crypto space, phishing is booming, and AI is accelerating…

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Filed under: News - @ June 23, 2025 11:29 am