Show Notes
Trust has always been the foundation of the credit union movement. Today, that trust is facing one of its greatest tests.
Artificial intelligence is making fraud more convincing, more scalable and more difficult to detect. As AI becomes more embedded in commerce, credit unions face a difficult balancing act—embracing innovation while protecting members from evolving threats.
In a recent PaymentsJournal podcast, Karen Postma, Senior Vice President of Risk Solutions at Velera and Suzanne Sando, Lead Fraud Management Analyst at Javelin Strategy and Research, discussed how AI-driven fraud, deepfakes and the emergence of agentic commerce could jeopardize the critical bond between members and credit unions.
Not only has this made it imperative for institutions to implement robust technological safeguards, it has also highlighted the importance of effective education and communication in maintaining strong member relationships.
Questioning the Source of Truth
Criminals have forged ahead in the AI arms race, largely because they aren’t constrained by compliance, operational or ethical obligations. As concerning as this is for financial institutions, consumers have also become aware of the risks as well.
Many have seen first hand how AI has made fraudulent communications more convincing through sophisticated scam texts, phishing emails and other impersonation attempts. And they understand these tactics are just the tip of the iceberg.
“I don't think this is an overreaction,” Sando said. “We have information overload when it comes to AI. From a consumer perspective, you're hearing about it in the news all the time—the good, the bad and the ugly. You're hearing about the ethical debates and the effects on the environment. We can't get away from it, and that may play into some of the fears that consumers have with AI.”
Consumer concerns have grown as deepfakes have demonstrated how convincingly AI can mimic a person’s voice or likeness in audio and video. These tools can be used to deceive friends and family, authorize fraudulent transactions or facilitate blackmail and other scams.
However, deepfakes are also indicative of the double-edged nature of AI. While consumers worry about becoming victims of these attacks, technology is also lowering the barrier for individuals to commit first-party fraud.
“That happens all the time, and then they're disputing it or claiming some type of loss when in actuality that wasn't the case,” Postma said. “Unfortunately, the accessibility of innovation in AI has made us question everything more, versus trusting in the consumer.”
“That's a weird position to be in. The member has always been our best source of truth, and unfortunately, I don't know that we're in that environment any longer,” she said.
The Emergence of Agentic Commerce
This dual nature of technology has also raised concerns about the emergence of agentic commerce, where consumers entrust AI agents to act as autonomous personal shoppers. Consumers already use AI to compare prices, research products and find the right item.
However, fully autonomous agentic commerce is an entirely different proposition.
“You're trusting an agent to understand your intent, and you're also trusting that agent to be able to execute in the way that you would want them to,” Postma said. “Such things as understanding intent from the initiation of the prompt, all the way through the transaction, all the way to a potential dispute process—and making sure that transparency is there. That’s going to be a critical avenue where the industry is going to have to adapt and figure out how to share that information.”
Beyond the foundational challenges of building these systems, fraud prevention becomes more complex. Rather than authenticating a transaction, financial institutions will also need to verify the customer’s intent and ensure the AI agent is acting according to the customer’s wishes.
Introducing a third party into the traditional transaction model a
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