A technology company says advances in AI technology are making identity fraud a major business risk for New Zealand businesses.
More than half (55%) of Kiwi organizations fell victim to fraudsters last year, costing businesses an average of $2.2 million a year, new research from technology company Lumin found.
We found that 90% of businesses are concerned that their critical contract workflows – the processes they use to sign, verify and complete legally binding business contracts – are vulnerable to AI-powered fraud.
Joel Foster, chief commercial officer at Lumin, told Breakfast that the rapid development of AI is completely changing how identity fraud works, increasing the risk for businesses.
“The increasing sophistication of technology and AI technology means that fraudsters have much more power and power today than they did a year ago, two years ago, three years ago,” he said.
Foster said the advent of AI has “significantly improved” the capabilities of fraudsters.
“There are a lot of things that need to be created in order to actually take over someone’s identity.” Foster said that with AI, fraudsters can do things “much faster and more sophisticated.”
“That means more attacks, faster attacks, and more realistic-looking attacks.”
Foster said organizations with “highly complex workflows” and large numbers of documents and contracts submitted for signature without going through a verification process are most susceptible to identity fraud.
The system failure exposed sensitive financial, corporate and personal information, causing a “massive” data breach and “catastrophic” economic damage, Lumin said.
The research found that 69% of New Zealand businesses are less willing to work with a partner who has recently experienced an identity fraud incident.
“One security failure can cause significant damage to your brand and lead to lost commercial opportunities.”
Lumin research shows 67% of Kiwi organizations are increasing their investment in identity verification technology, but this still lags behind Australia and the US at 82% and 78% respectively.
Mr Foster said it was “difficult” to keep up with evolving methods, but more technology solutions were being developed.
“There’s a lot of awareness about this and we have a lot of organizations to make sure we protect ourselves.”
He said companies’ responsibility to protect people’s privacy was “next level” and needed to be a “top strategic priority” at the highest levels.
“True understanding that your services are protected and making sure they are protected.”
Foster said companies need to adopt verification techniques, reiterating that the technology already exists.
“One of the big focuses with this technology that has been developed and is now available is to make sure it is easy to use.
“Because otherwise people won’t adopt it.
“That means we can ensure that technology is deployed to eliminate friction so that people can access their identity and prove their identity quickly and efficiently in any system.”
