The development of AI technology has made identity fraud a major business risk for New Zealand companies, according to a tech firm.
New research from technology firm Lumin found that more than half (55%) of Kiwi organisations had been hit by fraudsters in the last year, costing businesses an average of $2.2 million annually.
It found that 90% of businesses feared their critical agreement workflows – the processes they use to sign, verify, and complete legally binding business contracts – were vulnerable to AI-powered fraud.
Lumin’s chief commercial officer Joel Foster told Breakfast the rapid development of AI had completely changed how identity fraud worked, and was upping the risk for businesses.
“The sophistication that we have with technology, with AI technology, means the ability and the power that fraudsters have today is much more than we had a year ago, two years ago, three years ago,” he said.
Foster said that with AI there had been a “massive rise” in fraudsters' abilities.
“There are a lot of things they need to create to actually take over someone’s identity.” With AI, Foster said, fraudsters could do things “a lot faster and a lot more sophisticated”.
“So, more attacks, faster attacks, and attacks that seem far more real.”
Foster said organisations with “quite complex workflows” and lots of documents and agreements going out for signing without verification processes were most susceptible to identity fraud.
When systems failed, sensitive financial data, corporate information and personal information were exposed, triggering “extensive” data leaks and “devastating” financial damage, Lumin said.
The research found 69% of New Zealand businesses were less willing to work with a partner who had recently experienced an identity fraud incident.
“One security failure can lead to significant brand damage and loss of commercial opportunities.”
Lumin’s research found that while 67% of Kiwi organisations had increased investment in identity verification technology, they still lagged behind Australia and the US, at 82% and 78%, respectively.
Foster said it was “difficult” to keep up with the evolving methods but more technology solutions were being developed.
“There’s a big awareness of this, and so we’ve got lots of organisations out there to ensure that we can protect ourselves.”
He said the responsibility of businesses to protect people’s privacy was “next level” and needed to be a “number one strategic priority” at the highest level.
“To really understand and ensure that your services are protected.”
Foster said businesses needed to adopt verification methods and reiterated that the technology already existed.
“One of the big focuses around this technology that has been developed, and in my mind, is ready to use, is making sure the use of the technology is simple.
“Because otherwise people won’t adopt it.
“So, ensuring that you adopt the technology, making it frictionless, so you can actually ensure that people can access that identity, prove their identity quickly and efficiently, through whatever system.”
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