The Weaponisation of Deepfakes: Financial Institutions in the Age of AI Scams

How institutions must combat the growing threat from deepfake technology

In recent years, rapid advances in artificial intelligence have rendered the production of digital content and its realistic manipulation feasible, as well as their rapid dissemination to large audiences. Fraudsters increasingly resort to misusing technology when carrying out criminal activities. This has been realised through the strategic exploitation of the reputations of prominent individuals, such as those who occupy positions of authority within governmental institutions.

Europol defines “deepfake technology” as the use of artificial intelligence software to create synthetic copies of the voices and images of real people, often in video format (2023). The resulting deepfakes function as an impersonation technique in online fraud schemes. This issue erodes institutional trust and overall confidence in the system. The potential dangers associated with artificial intelligence extend beyond its capacity to replicate identities. The misuse of Bank of Italy governor Fabio Panetta’s image and the deepfake conference scam in Hong Kong exemplify the rise in deepfake technologies as operational tools for fraudulent activity in the financial sector (Hong Kong Special Administrative Region Government, 2024). In turn, these tools increase financial fraud by invalidating the mechanism for verifying trust in technology.

Deepfakes as a New Financial Threat

Financial institutions are particularly vulnerable because they depend on rapidly built trust. These institutions are uniquely sensitive to fraudulent activities, which have become more pervasive in the digital age (UK Finance, 2025). The potential impacts of deepfakes extend beyond the boundaries of synthetic media, ushering in a new paradigm of AI-powered deceptive mimicry. While such technological advances have increased the sector’s efficiency in areas such as digital banking, instant money transfers, and account opening procedures, they have also heightened the risk of identity fraud and identity theft (Meda, 2024).

Case Studies: Misuse of Fabio Panetta’s Image and Hong Kong Deepfake Video Conference Fraud

The Panetta case involved fraudsters’ using deepfake videos of Fabio Panetta, governor of the Bank of Italy, to create a false sense of corporate credibility, deceive users, and direct them to make fraudulent investments (FIRSTonline editorial team, 2026). Reuters reports that the Bank of Italy filed a complaint following the spread of fraudulent videos and images online that use the governor’s image to approve investments (2026). The Bank of Italy advised caution about the increasing prevalence of deepfake videos, which artificially reproduce the image or voice of financial authority members to give credibility to fraudulent messages. The utilisation of institutional authority as a means of deception, particularly in the context of investment fraud, serves as an indication of the erosion of credibility accorded to a public figure.

While the Panetta deepfake promoted fraudulent investment schemes to the public, the Hong Kong fraud targeted an institutional process. An employee at a multinational firm impersonated a senior company executive and issued instructions to another employee to organise a meeting (Chen and Magramo, 2024). In the resulting video conference, participants appeared to be fellow employees but in reality were artificial images created with deepfake technology (French, 2024). The victim believed they saw colleagues at the meeting and recognised their voices. Convinced of the legitimacy of the instructions given, the individual consequently approved the transfer of financial transactions totaling approximately HK$200 million to five local bank accounts, equating to approximately US$25.6 million (Chen and Magramo, 2024).

The relevance of this incident is not only the financial damage, but the nature of the doubt itself. The employee initially approached the request with suspicion, but the visual and social reality of the meeting was sufficient to eliminate this doubt. In this sense, deepfakes do not simply impersonate identities, but elevate authority and familiarity to a convincing level.

Institutional Responses

UK Finance’s 2025 Annual Fraud Report clearly shows that 70% of fraud cases occur through online sources, and while fraud via telecommunications is smaller in volume (16%), it accounts for 36% of total losses (UK Finance, 2025). The latest report shows that investment fraud losses reached £144.4 million in 2024, a 34% increase from the previous year, and that 53% of investment frauds occurred online in 2023 (UK Finance, 2025). Consequently, it is imperative for the financial sector to recognise the significance of deepfakes and to address them with the same gravity and urgency exhibited by other pressing issues within the domain of cybersecurity awareness. The Hong Kong case indicates that, although employee vigilance remains essential, synthetic authority, perceived urgency and a perceived social consensus can be effective persuasion tools when presented convincingly.

Combat Through Cooperation

Institutionally, there is a necessity for enhanced coordination amongst the teams responsible for fraud prevention, cybersecurity and operational risk management. This is due to the increasing convergence of deepfake enabled scams, which serve to blur the boundaries between social level, identity manipulation and payment fraud.

Responsibility for mitigating the impact of the growing risks of deepfake-enabled fraud does not lie solely with financial institutions. In cases where fraud originates from mass media, closer collaboration between telecommunications providers, digital platforms and financial institutions is necessary to develop effective prevention strategies. It is critical that operational teams review and verify information rather than relying on emails or video calls. This coordinated approach could likely play a role in strengthening the detection and prevention of fraud by establishing a mechanism to enhance cooperation between fraud prevention and operational risk teams. The surge in deepfake-related fraudulent activity only underscores the imperative for such multifaceted approaches to financial security.

Bibliography

Banca d’Italia (2024) Warning: deepfake videos circulating online. Available at: https://www.bancaditalia.it/media/notizia/warning-deepfake-videos-circulating-online/?com.dotmarketing.htmlpage.language=1&dotcache=refresh

Chen, H. and Magramo, K. (2024) Finance worker pays out $25 million after video call with deepfake ‘chief financial officer’. CNN, 4 February. Available at: https://edition.cnn.com/2024/02/04/asia/deepfake-cfo-scam-hong-kong-intl-hnk

Chen, V. and Potter, M. (2026) Bank of Italy warns over deepfake video scams using Governor Panetta. Reuters, 26 February. Available at: https://www.reuters.com/business/finance/bank-italy-warns-over-deepfake-video-scams-using-governor-panetta-2026-02-26/

Europol (2023) Online fraud schemes: A web of deceit. Europol Spotlight Report. Available at: https://www.europol.europa.eu/cms/sites/default/files/documents/Spotlight-Report_Online-fraud-schemes.pdf

FIRSTonline editorial team (2026) Deepfake on Fabio Panetta: Bank of Italy warns of fake videos and online scams featuring the Governor. FIRSTonline, 26 February. Available at: https://www.firstonline.info/en/Deepfake-on-Fabio-Panetta–Bank-of-Italy-warns-of-fake-videos-and-online-scams-featuring-the-governor./

French, L. (2024) ‘Deepfake video conference convinces employee to send $25M to scammers’, SC Media. Available at: https://www.scworld.com/news/deepfake-video-conference-convinces-employee-to-send-25m-to-scammers

Hong Kong Special Administrative Region Government (2024) LCQ9: Combating frauds involving deepfake. Available at: https://www.info.gov.hk/gia/general/202406/26/P2024062600192.htm

Meda, K. (2024) Identity theft is being fueled by AI & cyber-attacks. Thomson Reuters. Available at: https://www.thomsonreuters.com/en-us/posts/government/identity-theft-drivers/

UK Finance (2025) Annual Fraud Report 2025. Available at: https://www.ukfinance.org.uk/system/files/2025-05/UK%20Finance%20Annual%20Fraud%20report%202025.pdf