Professor Deirdre Ahern of Trinity College Dublin’s School of Law delivered a keynote address at the Annual Conference of the Financial Planning Standards Board last month, warning financial professionals about the ethical, regulatory and legal risks posed by artificial intelligence in the financial services sector.
Her presentation outlined key requirements of the EU AI Act, including literacy obligations for firms adopting AI tools. She also flagged the growing risks tied to robo-advising and the problem of “AI washing”, where advisers misrepresent their use of new technologies in their business.
Prof. Ahern also highlights the rising threat of deepfake-driven fraud, citing a recent Hong Kong case in which a finance employee at a multinational firm was deceived into transferring $25m after fraudsters impersonated the company’s CFO while using deep fake technology during a video call. She stressed that hyper-realistic audio and video forgeries now pose a significant challenge for identity verification, client onboarding, and internal controls.
Financial services organisations will need to understand and build strategies to recognise and counter AI-related risks before they escalate further. Without proactive strategies for staff training, firms may find themselves unprepared for a rapidly evolving threat landscape.
