How AI is Making it Harder to Distinguish Reality from Fiction

Every winter, many families revive a familiar ritual. Children rush to find a small elf that supposedly watched them overnight and moved before morning. The hunt is part of the excitement. As children grow older, that excitement often turns into doubt, with questions about whether the elf is magic or simply a parental story. 

Recently, new technology has given this tradition a modern upgrade. Parents can now use AI to create videos showing the elf moving after dark. These realistic clips blur imagination and reality. The same tools are reshaping social media and other spaces, making it harder to tell what is real. That growing uncertainty presents serious challenges for trust-based industries, including banking. 

AI has become deeply embedded in how financial institutions operate. Fintech firms and banks rely on it to speed up customer onboarding, automate reviews, detect suspicious activity, and assess credit risk. These tools offer more than efficiency. They shape competitive advantage in an industry where consumers expect fast, seamless digital experiences. 

However, as automated systems take on more responsibility, the role of human judgment is shrinking, and this aspect carries risk. The issue is not the presence of AI but the assumption that it can be trusted without sufficient oversight. Even when humans remain part of the process, many reviewers are not fully trained to recognize the new forms of deception AI makes possible. 

At the same time, the same technology strengthening banks is also empowering criminals. Generative AI can produce fake identification documents, fabricated identities, and highly realistic audio or video impersonations that slip past traditional safeguards. Criminal groups are adopting these tools to scale their operations, increasing both the quality and quantity of fraud attempts. 

Customer identification programs, designed to prevent money laundering and financial crime, have become a prime target. AI can generate counterfeit passports or utility bills that closely resemble legitimate documents. Synthetic personas can be built from scratch, complete with faces, voices, and biometric data, allowing accounts to be opened without a real person behind them. 

What makes this threat particularly dangerous is its precision. Fraudsters are not guessing. AI allows them to study bank policies, regulatory filings, and enforcement actions, then design fake identities tailored to meet exact requirements. 

The path forward is not about rejecting AI but managing it wisely. Financial institutions should invest in stronger verification practices, ongoing staff training, and layered security controls. This includes advanced document analysis, cross-referencing data with trusted sources, robust liveness checks during video verification, deepfake detection tools, and continuous behavioral monitoring. 

Risk will never be eliminated entirely. The goal is resilience. By combining technology with informed human oversight, banks can adapt as threats evolve and maintain trust in an increasingly synthetic digital world. 

More advances in technology from enterprises like D-Wave Quantum Inc. (NYSE: QBTS) could avail tools that can help in efforts to manage the risks associated with AI, though they could also in turn introduce new risks that financial institutions may have to anticipate and take mitigation measures. 

NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS 

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