Niall Hearty of Rahman Ravelli considers the nature and scale of the problem
One in four businesses lost over $1 million in a single fraud incident in the past year, according to a report.
The report by cybersecurity firm Trustmi says that more than 80% of companies were targeted by fraud at least once in 12 months, with nearly half suffering financial losses as a result.
It states that generative artificial intelligence has made it easier for fraudsters to run large-scale sophisticated campaigns that involve mimicking individuals, such as employees and executives, while also being able to use technology to jump between systems and avoid detection.
The report highlights corporate vulnerability due to a fragmented approach to fraud prevention. It pinpoints no single person or group in a company taking responsibility for managing the risks "from start to finish" as a reason why the fraudsters can succeed.
The report's research found that 70% of incidents spanned numerous platforms and teams, with fraudsters moving across company systems. It adds that the escalating risks emphasise the need for increased coordination between the cybersecurity and finance departments in companies.
The areas of corporate activities where there were the greatest number of fraud-related failures were e-mail and messaging security (44.6%), employee security awareness training (32.2%), compromised third-party vendors (31.6%), and bank account validation (26.5%).
Trustmi CEO Shai Gabay said: "GenAI has weaponised fraud into a coordinated business attack. Attacks now cross multiple systems, exploiting every gap between teams and tools."
Although human error is still being exploited, the report attributes financial losses to traditional safeguards such as internal controls being vulnerable to AI attacks. Understanding cybersecurity and the threat from enhanced AI attacks is now more critical than ever. Solicitors and third party experts can and should be engaged to counter this ongoing threat as it continues to evolve.
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