This Platform Aims To Combat Rising AI Financial Fraud Schemes

An AI-powered solution with the goal to fight AI-powered financial fraud.

AI can offer many benefits including aiding research and development; helping speed critical decision-making in emergency situations; and assisting organizations in their business transformation goals, including automating processes.

There are dark sides to AI though. Concerns have been raised about security risks, including the proliferation of deepfakes and AI being used as a tool to ramp up ransomware, especially as agentic AI gains more of a foothold in enterprises.

Now, new reports have emerged that AI is increasingly being used to commit financial fraud, and one company says its offering can help fight that risk.

Flagright provides AI-based anti-money laundering (AML) and risk management solutions. Initially focused on solutions to monitor real-time financial transactions, the company pivoted to ways to help thwart AI-based financial fraud amid the recent explosion in AI adoption.

And reports show AI-fueled financial fraud is on the rise. Last year, a multinational company in Hong Kong lost $25.6 million, after an AI-generated deepfake of the company’s executives, including the CFO, demanded wire transfers be made.

According to a blog post from Nvidia: “Generative AI can be exploited for financial harm in voice authentication security measures as well. Some banks are using voice authentication to help authorize users. A banking customer’s voice can be cloned using deep fake technology if an attacker can obtain voice samples in an effort to breach such systems. The voice data can be gathered with spam phone calls that attempt to lure the call recipient into responding by voice.”

“Chatbot scams are such a problem that the U.S. Federal Trade Commission called out concerns for the use of LLMs and other technology to simulate human behavior for deep fake videos and voice clones applied in imposter scams and financial fraud,” Nvidia’s post continued.

“Deloitte’s Center for Financial Services predicts that genAI could enable fraud losses to reach ... $40 billion in the United States by 2027, from ... $12.3 billion in 2023, a compound annual growth rate of 32 percent,” according to a report from Deloitte.

Flagright announced that it had recently raised $4.3 million in seed round funding “to further develop Flagright solutions and fund international expansion,” the company said in a news release.

Flagright’s AML offerings include an AI-native compliance operating system, dynamic risk scoring, automated case management, real-time transaction monitoring, and AML screening.

The company also provides its AI Forensics for Screening AI agent, designed to reduce false positives and human errors, according to a news release. With the seed round of funding, Flagright said it will expand this feature into an “entire product family that automates compliance workflows for screening, monitoring, governance, and quality assurance.”