Our world continues to hurtle along a path of life influenced by digital media, social and otherwise. There are many advantages to taking this path, but perhaps just as many, if not more dangers. Sorting fact from fiction has become an increasingly bigger challenge. And while a fake ‘good news’ story might cause little harm, financial disinformation can have disastrous consequences.
There’s nothing new about financial disinformation, of course. Humans have unfortunately been looking to take advantage of the gullible for centuries or more. The advent of social media has clouded the issue significantly. Twenty years ago you would have obtained your news via major television and radio networks and through daily newspapers.
While such institutions may not engender great trust in 2023, they were considered a generally reliable source of facts back then. And many of them still are. However, they are now competing with what looks like ‘news’ generated and/or disseminated through platforms such as Twitter, Facebook and Instagram.
Most of us have learned to be wary of potentially fake news, particularly financial disinformation. We rightly make an effort to confirm the information supplied is from a trusted source.
Financial disinformation – now with added AI!
The rapidity with which information spreads through large social media sites has made that more difficult. And with the recent advances made through artificial intelligence (AI), things aren’t going to get any easier anytime soon.
As recently as November, ASIC issued a warning about a fake initial public offering (IPO) of shares in Porsche. The motoring giant had just delivered a genuine IPO and soon after scammers impersonating Australian companies offered fake investments for Porsche’s IPO.
In 2021, Twitter was awash with reports that both the Israel Investment Fund Group and Apple had each purchased over $2 billion in crypto. Neither report was true.
Spotting such fake disinformation is difficult enough. Now imagine the familiar face or voice of a trusted financial expert actually encouraging your investment in that fake IPO. Of course, a trusted financial expert wouldn’t do such a thing. But a scammer using AI could create audio or video footage of that expert seemingly doing just that.
That may sound like a story from science fiction but much of science fiction is fast becoming science fact. And AI is a big part of that.
What can you do to help protect yourself against financial disinformation?
Online personal finance magazine Kiplinger published a list of tips for spotting fake financial news in 2020. Three years is a long time in finance, even more so in technology, but the advice provided remains largely relevant.
Among the advice offered is take financial forecasts with a grain of salt. Will the market rise? How will the economy perform this year? Will the Reserve Bank raise interest rates?
Speculation, even if well-informed, is still speculation. Last week provided Australians with a perfect example of this. The Reserve Bank defied almost universal predictions of a hold on the interest rate, raising it by 0.25 basis points.
Kiplinger’s other nuggets of advice include checking sources and, importantly, the motivation of the source and disseminator of the news. Do they stand to gain from the spread of financial disinformation?
If you have a trusted financial adviser, run things past them – preferably in person. When considering financial advice, proceed with caution.
And finally, no matter the advances made in AI and other technologies, one piece of advice will remain as sound as ever: If it sounds too good to be true, it probably is.
Have you received scam texts? Do you find it easy to spot them? Why not share your experience in the comments section below?