A tech company says the rapid rise of AI is turning identity fraud into a serious risk for New Zealand businesses.
According to new research from tech firm Lumin, over half of New Zealand organisations (55%) were targeted by fraudsters in the past year, with businesses losing an average of $2.2 million annually. The study also found that 90% of businesses were concerned that their key agreement processes, the systems used to sign, verify and finalise legally binding contracts, could be exposed to AI-driven fraud.
“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,” Lumin’s chief commercial officer Joel Foster said.
He said AI had led to a serious increase in the capability of fraudsters.
“There are a lot of things they need to create to actually take over someone’s identity,” Foster said. With AI, fraudsters are now able to operate “a lot faster and a lot more sophisticated” than before; this means “more attacks, faster attacks, and attacks that seem far more real.”
Foster said organisations with “quite complex workflows,” especially those sending out large volumes of documents and agreements for signing without strong verification processes, were the most vulnerable to identity fraud.
When these systems break down, sensitive financial, corporate and personal data can be exposed, leading to “extensive” data breaches and “devastating” financial losses.
“One security failure can lead to significant brand damage and loss of commercial opportunities.”
While 67% of New Zealand organisations have boosted investment in identity verification technology, this still trails behind Australia (82%) and the United States (78%).
Foster said it was “difficult” to keep up with the constantly evolving methods, but noted that more technology solutions were being developed to help address the problem.
He said businesses now had a “next level” responsibility to protect people’s privacy, adding that it needed to be treated as a “number one strategic priority” at the highest level of leadership.
Foster emphasised the need for businesses to adopt stronger verification methods, emphasising that the technology to do so already exists.
A key focus in developing this technology has been ensuring it is ready to use and easy for businesses to adopt.
“Because otherwise people won’t adopt it,” Foster added.
The aim, he said, is to make adoption seamless and frictionless, so people can quickly and efficiently prove their identity through whichever system is being used.