Deepfake technology just made CEO fraud a whole lot easier to carry out.

A single deepfake video or voice clone attack can cost your company millions. And it’s only getting worse.

With losses estimated at $26 billion and counting, CEO fraud is one threat you can’t afford to ignore.

But here’s the good news: by understanding the tactics scammers use and implementing the right defenses, you can protect your business from becoming another statistic.

In this guide, we’ll arm you with the knowledge and strategies you need to stay one step ahead— and keep your company’s hard-earned money where it belongs.

CEO Fraud is Being Escalated by Deepfake

• Deepfake technology is making CEO fraud more believable and harder to detect
• Cybercriminals are using AI-generated audio and video to impersonate executives and trick employees into transferring funds or sensitive data
• The rise of deepfake-powered CEO fraud calls for stronger security measures and employee training

In recent years, the advent of deepfake technology has given cybercriminals a powerful tool to carry out CEO fraud attacks.

Deepfakes, which use artificial intelligence to create convincing fake audio and video, are now being used to impersonate company executives with alarming precision.

According to a 2021 report by Trend Micro, the number of deepfake videos online has doubled every six months since 2018, reaching over 85,000 by the end of 2020.

The Convincing Nature of Deepfake CEO Fraud

One of the most striking examples of deepfake CEO fraud occurred in 2019 when cybercriminals used AI-generated audio to impersonate the CEO of a UK-based energy firm.

The fraudsters convinced an employee to transfer €220,000 ($243,000) to a Hungarian supplier, claiming that the payment was urgent. The company only realized it had fallen victim to fraud when the real supplier followed up about the missing payment.

The convincing nature of deepfake CEO fraud lies in its ability to mimic the voice, facial expressions, and mannerisms of a targeted executive.

Cybercriminals can scrape audio and video samples as short as 3 seconds from publicly available sources, such as interviews, conference presentations, and social media posts, to train their AI models.

The resulting deepfakes can be impossible to distinguish from the real thing.

The Growing Threat

As deepfake technology becomes more accessible and sophisticated, the threat of CEO fraud is expected to grow.

A 2021 report by PwC predicts that deepfake-based attacks will cost businesses $250 million in losses by 2024, up from $10 million in 2020.

With more executives working remotely and relying on video conferencing tools, cybercriminals have more opportunities to impersonate them without raising suspicion.

Real-World Consequences

The consequences of falling victim to deepfake CEO fraud can be severe. In addition to the immediate financial losses, companies face reputational damage, legal repercussions, and decreased employee morale.

The psychological impact on employees who have been tricked can also be significant, leading to increased stress, anxiety, and job dissatisfaction.

As deepfake technology continues to evolve, businesses must adapt their security measures and employee training programs to stay ahead of the threat.

This includes implementing multi-factor authentication, establishing clear protocols for financial transactions, and educating employees on how to spot and report suspicious requests.

Taking proactive steps to combat deep fake CEO fraud is necessary to protect your assets, reputation, and employees from the growing threat.

C-Suite Fraud Prevention: Best Practices

• Implement a multi-layered approach to prevent CEO fraud
• Educate employees on identifying and reporting suspicious activities
• Establish clear protocols for financial transactions and sensitive data access

CEO fraud is a growing threat to businesses of all sizes. In this type of scam, fraudsters impersonate high-level executives, such as CEOs or CFOs, to trick employees into transferring funds or revealing sensitive information.

Most insurers have requirements for mitigation steps like employee training and testing in place against deepfake.

Implementing a set of best practices is necessary to protect your organization from CEO fraud and ensure insurance coverage in the case of a successful attack.

Implement Deepfake Awareness Employee Training

As deepfake technology becomes more sophisticated, it’s essential to educate your employees about the potential risks. Tailor your training programs to address the specific needs of each department so as not to waste resources:

• HR staff should be trained on data security best practices and how to identify fake job applications or impersonation attempts.
• Finance departments must be aware of the risks specific to their roles, such as fraudulent wire transfer requests or fake invoices.

Implement Deepfake Vulnerability Testing

To assess your organization’s readiness to defend against deepfake-based threats, your security teams should conduct regular vulnerability tests.

Combine various deepfake techniques to simulate realistic attack scenarios:

• Use deepfake audio and video to impersonate executives in phone calls or video conferences
• Create fake social media profiles and attempt to connect with employees
• Send phishing emails with deepfake content to test employee awareness

You may not yet have the resources to implement measures such as these quickly. Look for an external supplier, such as Breacher.ai, who can quickly implement awareness training and simulations to educate employees.

Analyze Test Results and Improve Defenses

After each vulnerability test, analyze the results to identify weaknesses in your organization’s defenses. Use this information to:

• Update employee training programs to address identified gaps
• Implement stronger security measures, such as multi-factor authentication or email filtering
• Refine incident response plans based on the test findings

Implement Multi-Factor Authentication (MFA)

MFA adds an extra layer of security by requiring users to provide two or more verification factors to access accounts or systems. To effectively implement MFA:

• Require MFA for all financial transactions and sensitive account access
• Use a combination of factors, such as passwords, tokens, and biometrics
• Regularly review and update MFA settings to ensure effectiveness

Choose the Right MFA Solution

When selecting an MFA solution for your organization, consider factors such as:

• Ease of use and integration with existing systems
• Compatibility with various devices and platforms
• Scalability to accommodate future growth
• Compliance with industry regulations and security standards

Establish Clear Payment Authorization Protocols

To prevent unauthorized financial transactions, establish strict protocols for approving payments:

• Define a clear chain of command for approving financial transactions
• Require multiple approvals for transactions above a certain threshold
• Conduct regular audits to identify and address any weaknesses in the process

Implement Segregation of Duties

Segregation of duties ensures that no single individual has control over the entire payment process. To implement this principle:

• Assign different roles and responsibilities to separate individuals
• Rotate duties periodically to prevent collusion and detect irregularities
• Use software tools to enforce segregation of duties and monitor compliance

By implementing these best practices, your organization can significantly reduce the risk of falling victim to CEO fraud. Remember, prevention is key, and a proactive approach to security is essential.

Responding to CEO Fraud: Swift Action is Key

• Immediate action is crucial to minimize damage and prevent further losses
• Notify authorities, banks, and activate your incident response plan
• Gather evidence and document all actions taken for future reference

Immediately Notify Relevant Authorities

When you suspect or confirm a case of CEO fraud, act quickly and notify the authorities. Start by contacting your local law enforcement and filing a report.

Provide them with all the relevant details, including the date and time of the incident, the amount of money involved, and any correspondence with the fraudster.

Next, inform your bank and any other financial institutions that may be involved in the fraudulent transaction. They can help freeze the affected accounts and prevent the transfer of funds to the scammer.

Be prepared to provide documentation and evidence to support your claim.

Reporting to the FBI’s Internet Crime Complaint Center (IC3)

In addition to local law enforcement and your bank, you need to report the incident to the FBI’s Internet Crime Complaint Center (IC3). The IC3 is a centralized repository for collecting and analyzing reports of internet-related crimes, including CEO fraud.

By reporting the crime, you contribute to the FBI’s efforts to track and investigate these cases, potentially helping to prevent future incidents and bring the perpetrators to justice.

To file a complaint with the IC3, visit their website at www.ic3.gov and complete the online complaint form.

Provide as much detail as possible, including any relevant emails, wire transfer information, and other documentation related to the fraud.

Activate Your Incident Response Plan

Every organization should have an established incident response plan to handle security breaches and fraud incidents. When CEO fraud occurs, it’s time to implement that plan.

Your incident response team should follow the predetermined steps to contain the damage and investigate the incident.

Start by isolating any affected systems and accounts to prevent further unauthorized access or transactions. Change passwords and access controls as necessary, and monitor for any additional suspicious activity.

Document the Incident

As you work through your incident response plan, document every action taken and piece of evidence collected. This documentation will be invaluable for future reference, whether for internal reviews, legal proceedings, or insurance claims.

Keep detailed records of:

• The initial discovery of the fraud
• All communications with the fraudster
• Steps taken to notify authorities and financial institutions
• Actions taken to isolate affected systems and accounts
• Any additional findings during the investigation

In Conclusion

CEO fraud, now turbocharged by deepfake technology, poses a significant threat to businesses in 2024.

To fortify your defenses against CEO fraud, implement targeted awareness training for employees and regularly conduct deepfake vulnerability testing. Ensure strong email authentication protocols, establish clear payment authorization procedures, and implement multi-factor authentication.

The financial and reputational consequences of falling victim to CEO fraud can be severe, with the potential for significant losses and damage to client trust.

As a business leader, what steps will you take today to ensure your organization is prepared to defend against the ever-evolving threat of CEO fraud?

Contact us at breacher.ai for a free demo of how our fully managed services can protect your organization from deepfake attacks.