AI-powered synthetic identity attacks are emerging as a serious threat to financial institutions. Generative AI enables fraudsters to create convincing fake identities that evade detection, often acting as sleeper accounts that mimic legitimate behavior until they cash out. While 83% of banks plan to strengthen onboarding controls, only 36% focus on detecting existing threats. With detection difficult upstream and deepfake tools becoming more accessible, traditional methods are losing effectiveness. Financial institutions must adopt proactive strategies, including deepfake detection, enhanced classification, and vigilant tracking to counteract this evolving risk.

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