KPMG survey finds AI deepfakes raise fraud fears among 95% of victimized Canadian companies
A survey by KPMG in Canada reveals significant concerns among Canadian businesses about the risk of fraud, particularly in relation to AI-generated deepfakes.
Nearly all organizations surveyed, which have been victims of fraud, expressed worry that deepfakes and generative AI could amplify the threat of fraud.
Specifically, 95 percent of the leaders from 300 victimized organizations are concerned about the increased risk of fraud due to deepfakes, with 91 percent fearing that generative AI could facilitate corporate misinformation and disinformation campaigns.
About one third (31 percent) of these organizations have faced external fraud in the form of misinformation or disinformation campaigns.
Enzo Carlucci, national forensic leader at KPMG in Canada, emphasized the complex evolving fraud landscape, exacerbated by modern technology, economic shifts, geopolitical tensions, and remote work.
The survey indicates that 95 percent of companies believe generative AI and social engineering scams make fraud easier to commit.
The poll highlights include:
- 95 percent acknowledge that the rise of generative AI and deepfakes has escalated the fraud risk.
- 91 percent are concerned about AI enabling more corporate misinformation/disinformation campaigns.
- 84 percent are worried economic conditions may drive employees or customers to commit fraud.
- 87 percent believe remote work has increased fraud risk due to less oversight.
- 89 percent had to quickly implement or scramble to put in place fraud detection and prevention programs after a fraud incident.
- 43 percent are currently experiencing internal fraud, while 33 percent face external fraud challenges.
- 53 percent report a loss of 1-to-5 percent of their profits to fraud in the past year.
Carlucci pointed out that fraud tends to rise during economic recessions and that remote work may ease fraudulent activities due to reduced monitoring. The survey also found that fraud cost nearly nine in 10 Canadian companies up to 5 percent of their profits in the last year.
The most reported external fraud schemes include payment fraud, misinformation/disinformation campaigns, and account takeover or synthetic identity fraud. Internal fraud typically involves embezzlement, distortion of ESG data, and theft of personally identifiable information.
Despite 77 percent of companies having a fraud detection program, only 39 percent deem it “extremely effective.”
About half have a fraud prevention program, with a similar proportion rating their anti-fraud policies and financial controls as "extremely effective." Emerging technologies like AI, data analytics, and biometric verification are being adopted by nearly half of the companies to mitigate fraud risks.
Marilyn Abate, a partner in KPMG's Forensic and Financial Crimes practice, emphasizes the necessity of using AI to combat AI-driven fraud, highlighting the importance of regular fraud risk assessments to identify and address vulnerabilities.
