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More identity theft, AI deepfakes, and ESG fraud in Canada this year, says KPMG

A look at KPMG’s report on Canada’s fraud landscape and what business can do about it

Photo by freestocks on Unsplash
Photo by freestocks on Unsplash

Fraud used to be synonymous with bad cheques and con-men — but today’s fraud has become much more digitized. And small- to medium-sized businesses are the most at risk. According to the MNP, 98% of cybersecurity insurance claims came from small to medium-sized businesses. 

KPMG recently released about the changes in Canada’s fraud landscape this year. Here are some highlights from their research:

AI deepfakes on the rise

Generative AI has allowed hackers to imitate internal employees and executives in voice and likeness through deepfakes. Fraudsters use deepfakes to impersonate people and access organizational data and even payments. It’s essentially a next-level version of identity theft that makes businesses susceptible to account takeover attacks. 

  • 95% of Canadian SMB leaders whose organizations have experienced fraud see generative AI and deepfakes as a heightened fraud risk

Solution: Identity-proofing measures & tech

Multi-factor authentication can help catch deepfakes that trick biometrics. Businesses can use AI-powered website behavior analytics and website history in combination with unique passwords, biometrics, and single sign-on (SSO). 

ESG fraud has entered the chat

Environmental, Social and Governance (ESG) initiatives help businesses satisfy various stakeholders and even obtain funding and grant money. ESG fraud entails businesses who misrepresent ESG success for their benefit, as well as money laundering under the guise of ESG investment. This often is a result of internal fraud, where members of an organization knowingly conduct unethical activities around ESG. 

  • 8 in 10 Canadian SMB leaders whose organizations have experienced fraud worry about unknowingly committing ESG fraud

KPMG suggests organizations swiftly assess risks, including implementing strong anti-fraud measures to avoid damaging trust with customers and partners. 

Leverage the right tech for fraud prevention

Many enterprises fall short on mitigating cybersecurity risks. The IDC reports that approximately half of the businesses surveyed in 2023 say they don’t frequently scan and monitor their remote endpoints, and it takes them at least a week to recognize active security threats.

  • 67% of Canadian SMB leaders whose organizations have experienced fraud say they’re using AI and/or Machine Learning as fraud prevention, which might indicate an over-reliance on tech

KPMG recommends businesses get on the same tech train as fraudsters. AI fraud prevention tech might include automation for threat detection and fraud alerts, as well as data monitoring. 

Read the full roundup of Canada fraud insights here

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Written By

Veronica Ott is a freelance writer and digital marketer with a specialization in finance and business. As a CPA with experience in the industry, she's able to provide unique insight into various monetary, financial and economic topics. When Veronica isn't writing, you can find her watching the latest films!

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