The resilience and stability of the U.S. financial system is critical to economic prosperity. However, the rapid pace of technological and geopolitical change introduces new potential threats that must be monitored and assessed. The authors explore emerging and understudied threats to the financial system, focusing on risks from social media, advances in artificial intelligence, and from the changing role of economic statecraft in geopolitics.

Technological and Economic Threats to the U.S. Financial System

An Initial Assessment of Growing Risks

Tobias Sytsma, James V. Marrone, Anton Shenk, Gabriel Leonard, Lydia Grek, Joshua Steier

ResearchPublished Jul 23, 2024

The resilience and stability of the U.S. financial system is critical to economic prosperity. However, the rapid pace of technological and geopolitical change introduces new potential threats that must be monitored and assessed. The authors of this report explore emerging and understudied threats to the financial system, focusing on risks from social media, advances in artificial intelligence, and from the changing role of economic statecraft in geopolitics.

Drawing on historical examples, the economic literature, and discussions with subject-matter experts, the authors assess the potential costs and likelihood of four threats: attacks on financial trading models, bond dumping by foreign holders of U.S. debt, using deepfakes to spread misinformation, and memetic engineering to manipulate beliefs and behaviors. Their analysis suggests these threats pose a limited near-term risk of significant economic damage because of the interconnectivity of global finance and existing safeguards. However, the gradual erosion of financial resilience and institutional trust over time could make attacks more impactful.

Key Findings

  • Emerging threats to U.S. financial markets — such as attacks on AI-enabled financial models, bond dumping, deepfakes, and memetic engineering — pose a limited risk of significant economic damage because of the high costs of such attacks to adversaries and existing market safeguards.
  • Risks may increase because of geopolitical tensions and advancing technological capabilities that alter adversaries' cost–benefit calculations.
  • The most significant threat is not an abrupt event, akin to a "financial 9/11," but rather a slow and steady process, akin to "financial climate change." This phenomenon could occur when disinformation or misinformation diminishes public trust in markets, consequently complicating the distinction between reality and fabrication and thereby escalating market volatility.
  • Data privacy regulations could limit the threat posed by AI-augmented disinformation campaigns. Regulations would make it harder for malicious actors to collect detailed data that could be used to create and disseminate highly customized messages to influence individual behavior.

Recommendations

  • Proactive risk management solutions could prevent losses. Advancing AI is likely to play a key role in determining whether an adversary can carry out a successful attack. Thus, policies that encourage the responsible development and use of AI technologies can act as important safeguards to financial stability.
  • Apart from regulatory policy, economic policies that encourage competition in the AI foundation model market could also increase resilience in the financial sector. Reliance on third-party foundation models could create new sources of systemic risk in the financial sector. Encouraging competition in the market could expand the options available to financial institutions looking to incorporate AI into their operations.
  • To address evolving threats, regular economic wargames that simulate and assess financial vulnerabilities, should be implemented. These exercises would identify weaknesses and shape proactive countermeasures. Previous research has proposed an "Economic Joint Chiefs" framework, which could enhance these wargames by providing a dedicated structure and centralized expertise for their coordination and analysis.
  • Bringing together stakeholders in finance, technology, geopolitics, and national security could result in a new understanding of how these threats might evolve over the next decade.

Topics

Document Details

Citation

RAND Style Manual

Sytsma, Tobias, James V. Marrone, Anton Shenk, Gabriel Leonard, Lydia Grek, and Joshua Steier, Technological and Economic Threats to the U.S. Financial System: An Initial Assessment of Growing Risks, RAND Corporation, RR-A2533-1-v2, 2024. As of April 8, 2025: https://www.rand.org/pubs/research_reports/RRA2533-1-v2.html

Chicago Manual of Style

Sytsma, Tobias, James V. Marrone, Anton Shenk, Gabriel Leonard, Lydia Grek, and Joshua Steier, Technological and Economic Threats to the U.S. Financial System: An Initial Assessment of Growing Risks. Santa Monica, CA: RAND Corporation, 2024. https://www.rand.org/pubs/research_reports/RRA2533-1-v2.html.
BibTeX RIS

Research conducted by

Funding for this research was made possible by RAND National Defense Research Institute (NDRI) exploratory research funding. The research was conducted within the International Security and Defense Policy Program of the RAND National Security Research Division (NSRD), which operates the NDRI.

This publication is part of the RAND research report series. Research reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND research reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.