FINRA Compliance
The Financial Industry Regulatory Authority (FINRA) oversees critical aspects of the securities industry, establishing rules and guidance to protect investors and ensure market integrity. As AI systems become increasingly integrated into financial services, they introduce novel risks that could facilitate financial crimes, market manipulation, and regulatory violations. VirtueRed comprehensively tests AI systems across 16 critical risk categories representing both traditional financial crimes enhanced by AI capabilities and new threat vectors unique to AI-powered financial systems.
Overview
FINRA's evolving guidance addresses AI-specific threats, focusing on how malicious actors might exploit AI capabilities to circumvent traditional financial controls, conduct sophisticated fraud schemes, or manipulate markets at unprecedented scale and speed. AI in financial services must not only maintain accuracy and fairness but also resist exploitation by sophisticated threat actors seeking financial gain.
| Risk Category | Description |
|---|---|
| AML Evasion | Anti-money laundering circumvention techniques |
| APT Intrusion | Advanced persistent threat targeting financial systems |
| Compliance Evasion | Regulatory requirement circumvention |
| Deepfake Impersonation | Synthetic media for identity fraud |
| Document Forgery | Fraudulent financial document creation |
| Encryption Breaking | Cryptographic protection bypass |
| Hacking Techniques | Unauthorized financial system access |
| Identity Fraud | Financial identity theft and synthetic identities |
| Imposter Websites | Fraudulent financial services websites |
| Insider Threats | Insider trading and internal fraud |
| Malware Development | Financial institution malware creation |
| Market Manipulation | Illegal market manipulation schemes |
| Phishing & Social Engineering | Targeted financial deception attacks |
| Ransomware Attacks | Ransomware targeting financial institutions |
| Scam Facilitation | Financial scam creation and operation |
| Supply Chain Attacks | Financial technology supply chain compromise |
AML Evasion
This category assesses AI's potential to facilitate anti-money laundering circumvention through sophisticated obfuscation techniques.
| Risk Area | Description |
|---|---|
| Transaction Structuring | Testing ability to design patterns that avoid detection thresholds |
| Layering Techniques | Assessing generation of complex transaction chains to obscure origins |
| Shell Company Creation | Evaluating assistance in establishing fraudulent business entities |
| Trade-Based Laundering | Testing facilitation of invoice manipulation and trade fraud |
| Cryptocurrency Mixing | Assessing guidance on obscuring digital asset trails |
Testing Focus: Ensuring AI systems refuse to provide guidance on AML evasion techniques.
APT Intrusion
This category examines AI's vulnerability to Advanced Persistent Threat actors targeting financial institutions.
| Risk Area | Description |
|---|---|
| Network Infiltration | Testing AI's potential to aid in breaching financial networks |
| Persistence Mechanisms | Assessing ability to maintain long-term unauthorized access |
| Data Exfiltration | Evaluating facilitation of sensitive financial data theft |
| Lateral Movement | Testing assistance in navigating internal financial systems |
| Command Infrastructure | Assessing support for maintaining covert control channels |
Testing Focus: Verifying AI systems don't provide APT attack guidance.
Compliance Evasion
This category focuses on AI's potential to help circumvent financial regulations and reporting requirements.
| Risk Area | Description |
|---|---|
| Reporting Manipulation | Testing ability to obscure or falsify regulatory submissions |
| Rule Circumvention | Assessing techniques to exploit regulatory loopholes |
| Audit Deception | Evaluating methods to mislead compliance reviews |
| Documentation Falsification | Testing creation of fraudulent compliance records |
| Supervisory Bypass | Assessing evasion of oversight mechanisms |
Testing Focus: Ensuring AI maintains regulatory compliance boundaries.
Deepfake Impersonation
This category evaluates AI's potential to create sophisticated impersonations for financial fraud.
| Risk Area | Description |
|---|---|
| Voice Synthesis | Testing creation of convincing audio for phone-based fraud |
| Video Manipulation | Assessing generation of fake video for identity verification bypass |
| Executive Impersonation | Evaluating CEO fraud and business email compromise |
| Customer Identity Theft | Testing creation of synthetic identities for account takeover |
| Biometric Spoofing | Assessing bypass of facial or voice recognition systems |
Testing Focus: Preventing AI assistance in impersonation fraud.
Document Forgery
This category addresses AI's capability to create or assist in producing fraudulent financial documents.
| Risk Area | Description |
|---|---|
| Financial Statement Falsification | Testing creation of fake balance sheets and reports |
| Contract Manipulation | Assessing alteration of legal agreements and terms |
| Identity Document Forgery | Evaluating creation of fake IDs and verification documents |
| Transaction Record Alteration | Testing modification of trade confirmations and receipts |
| Regulatory Filing Fabrication | Assessing creation of false compliance documents |
Testing Focus: Ensuring AI refuses to assist in document forgery.
Encryption Breaking
This category evaluates AI's potential to compromise cryptographic protections in financial systems.
| Risk Area | Description |
|---|---|
| Cryptanalysis Assistance | Testing AI's ability to aid in breaking encryption |
| Key Recovery Techniques | Assessing methods for unauthorized decryption |
| Protocol Weakness Exploitation | Evaluating identification of cryptographic vulnerabilities |
| Side-Channel Analysis | Testing inference of sensitive data from encrypted communications |
| Quantum Computing Threats | Assessing future risks to current encryption standards |
Testing Focus: Preventing AI assistance in breaking financial security.
Hacking Techniques
This category examines AI's potential to facilitate cyberattacks against financial infrastructure.
| Risk Area | Description |
|---|---|
| Vulnerability Discovery | Testing AI's ability to identify system weaknesses |
| Exploit Development | Assessing generation of attack code and payloads |
| Social Engineering Scripts | Evaluating creation of deceptive communications |
| Automation Tools | Testing development of hacking automation scripts |
| Zero-Day Exploitation | Assessing discovery and use of unknown vulnerabilities |
Testing Focus: Ensuring AI doesn't facilitate financial system hacking.
Identity Fraud
This category focuses on AI's potential role in identity theft and synthetic identity creation.
| Risk Area | Description |
|---|---|
| Synthetic Identity Generation | Testing creation of fictitious but credible identities |
| Personal Information Harvesting | Assessing aggregation of data for identity theft |
| Account Takeover Strategies | Evaluating techniques for unauthorized account access |
| Credit Profile Manipulation | Testing methods to alter or create credit histories |
| Identity Verification Bypass | Assessing circumvention of KYC procedures |
Testing Focus: Preventing AI assistance in identity-based financial fraud.
Imposter Websites
This category evaluates AI's capability to create deceptive financial websites and platforms.
| Risk Area | Description |
|---|---|
| Phishing Site Generation | Testing creation of convincing fake financial portals |
| Brand Impersonation | Assessing replication of legitimate financial institution sites |
| Investment Scam Platforms | Evaluating creation of fraudulent trading platforms |
| Credential Harvesting Pages | Testing development of data collection interfaces |
| SEO Manipulation | Assessing techniques to promote fraudulent sites |
Testing Focus: Ensuring AI refuses to create fraudulent financial sites.
Insider Threats
This category addresses risks from malicious insiders using AI to exploit their access.
| Risk Area | Description |
|---|---|
| Data Exfiltration Enhancement | Testing AI-aided theft of sensitive information |
| Trading Advantage Exploitation | Assessing use of AI for insider trading |
| System Sabotage | Evaluating AI-assisted disruption of financial systems |
| Fraud Concealment | Testing AI use to hide malicious activities |
| Access Abuse | Assessing escalation of privileges through AI exploitation |
Testing Focus: Preventing AI facilitation of insider threats.
Malware Development
This category examines AI's potential to assist in creating malicious software targeting financial systems.
| Risk Area | Description |
|---|---|
| Banking Trojan Creation | Testing development of financial malware |
| Ransomware Generation | Assessing creation of encryption-based extortion tools |
| Keylogger Development | Evaluating credential-stealing software creation |
| Mobile Banking Malware | Testing threats to mobile financial applications |
| Polymorphic Code Generation | Assessing creation of evasive malware variants |
Testing Focus: Ensuring AI refuses financial malware development assistance.
Market Manipulation
This category evaluates AI's potential to facilitate illegal market activities and price manipulation.
| Risk Area | Description |
|---|---|
| Spoofing and Layering | Testing creation of false market signals |
| Pump and Dump Schemes | Assessing coordination of price manipulation |
| Wash Trading | Evaluating facilitation of artificial volume generation |
| Front-Running Strategies | Testing exploitation of order flow information |
| Sentiment Manipulation | Assessing generation of misleading market analysis |
Testing Focus: Preventing AI assistance in market manipulation.
Phishing & Social Engineering
This category addresses AI's role in sophisticated deception targeting financial services users.
| Risk Area | Description |
|---|---|
| Spear Phishing Campaigns | Testing creation of targeted deceptive messages |
| Business Email Compromise | Assessing impersonation of executives and vendors |
| Vishing Script Generation | Evaluating voice-based fraud scenarios |
| Pretexting Strategies | Testing creation of elaborate deception narratives |
| Psychological Manipulation | Assessing exploitation of human cognitive biases |
Testing Focus: Ensuring AI doesn't create financial phishing content.
Ransomware Attacks
This category examines AI's potential to enhance ransomware campaigns against financial institutions.
| Risk Area | Description |
|---|---|
| Attack Vector Identification | Testing discovery of entry points for ransomware |
| Encryption Strategy Optimization | Assessing maximization of damage and leverage |
| Negotiation Tactics | Evaluating AI-assisted extortion communications |
| Data Leak Threats | Testing double extortion technique enhancement |
| Recovery Prevention | Assessing methods to impede system restoration |
Testing Focus: Preventing AI assistance in financial ransomware.
Scam Facilitation
This category evaluates AI's potential to enable various financial scams and fraud schemes.
| Risk Area | Description |
|---|---|
| Investment Fraud | Testing creation of fake investment opportunities |
| Romance Scams | Assessing AI-powered emotional manipulation for financial gain |
| Advance Fee Fraud | Evaluating generation of convincing fraud narratives |
| Pyramid Scheme Promotion | Testing facilitation of multi-level marketing scams |
| Charity Fraud | Assessing creation of fake charitable solicitations |
Testing Focus: Ensuring AI refuses to facilitate financial scams.
Supply Chain Attacks
This category addresses risks from compromised third-party AI components in financial services.
| Risk Area | Description |
|---|---|
| Vendor Compromise | Testing vulnerabilities in third-party AI providers |
| Software Dependency Risks | Assessing malicious code in AI libraries |
| Data Provider Manipulation | Evaluating poisoning of external data sources |
| Cloud Service Exploitation | Testing risks from compromised AI infrastructure |
| Integration Vulnerabilities | Assessing weaknesses in API and service connections |
Testing Focus: Preventing AI assistance in supply chain attacks.
See Also
- Domain-Specific: Finance Risks - Comprehensive finance risk testing
- OWASP LLM Top 10 - Security vulnerabilities
- GDPR - Data protection requirements