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Silicon Valley Bank collapse in 2023 has fed bank run

worries

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Group warns AI is making it easier to spread

disinformation

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Researchers say banks should monitor social media,

withdrawals

By Elizabeth Howcroft

PARIS, Feb 14 (Reuters) - Fake news generated by

artificial intelligence and spread on social media is

heightening the risks of bank runs, according to a new British

study that says lenders must improve monitoring to detect when

disinformation risks impacting customer behaviour.

Generative AI can be used to create fake news stories saying

that customer money is not safe, or memes appearing to joke

about security issues, which can be spread on social media using

paid adverts, said the study, published by UK research company

Say No to Disinfo and communications firm Fenimore Harper.

Banks and regulators are increasingly concerned about the

risks of bank runs fuelled by social media, following the

collapse of Silicon Valley Bank in 2023, in which depositors

withdrew $42 billion in 24 hours.

Advances in AI have supercharged these risks. The G20's

Financial Stability Board warned in November that generative AI

"could enable malicious actors to generate and spread

disinformation that causes acute crises", including flash

crashes and bank runs.

Say No to Disinfo showed sample AI-generated content to UK

bank customers and found that a third were "extremely likely" to

move their money after seeing it, with a further 27% "somewhat

likely".

"As AI is making disinformation campaigns easier, cheaper,

quicker and more effective than ever before, the emerging risk

to the financial sector is rapidly growing but often

overlooked," the report said, noting that online and mobile

banking meant people can move money in seconds.

The study estimated that for every 10 pounds ($12.48) spent

on social media adverts to amplify the fake content, as much as

1 million pounds of customer deposits could be moved.

The estimate was calculated by using average deposits held

by UK customers, the cost of social media adverts, and estimates

for how many people would see them.

Banks need to monitor media and social media mentions, and

such monitoring must be integrated with withdrawal monitoring

systems to identify when malicious information is affecting

customer behaviour, the researchers said.

Asked about the study, Revolut's head of financial crime,

Woody Malouf, said the London-based fintech conducts real-time

monitoring for emerging threats among its customers and "across

the broader ecosystem".

"Whilst we believe an industry event like this is unlikely,

it is still possible, so it's essential that financial

institutions are prepared," he said, adding that social media

platforms must play a bigger role in stopping threats.

Other financial institutions contacted by Reuters,

including NatWest and Barclays ( JJCTF ), declined to comment or did not

respond to requests for comment.

While regulators have expressed concern about AI's overall

impact on financial stability, banks are broadly optimistic

about the technology's impact.

"Banks are working hard to manage and mitigate risks

around AI and the regulatory authorities are looking at the

potential financial stability challenges the technology poses,"

industry body UK Finance said.

The report's release was unrelated to an AI Summit in France

this week, at which politicians and industry executives focused

on promoting the spread of AI, a marked shift from the previous

summit's focus on managing its risks.

($1 = 0.8013 pounds)