Auditors highlight AI fraud threat, urge defences against digital deception

In a stark warning to corporate Barbados, the nation’s top internal audit experts on Thursday sounded an alarm on a new digital menace: sophisticated fraud schemes powered by artificial intelligence that can replicate voices and faces with terrifying precision, potentially draining millions from unsuspecting businesses in seconds.

 

The Institute of Internal Auditors (IIA) Barbados Chapter, is warning businesses to stay alert against a global rise in sophisticated fraud schemes, including the use of artificial intelligence technologies.

 

Speaking to Barbados TODAY on the sidelines of the Institute’s 25th-anniversary celebrations, chapter president Corey Chadderton highlighted emerging threats such as deepfakes, urging businesses to stay vigilant and bolster their defences.

 

“This thing with deepfake technology, and the utilisation of artificial intelligence to create voice duplications or voice replications, not only voice but video as well, that is something that is gaining steam,” Chadderton said.

 

A deepfake is a video of a person in which their face or body has been digitally altered so that they appear to be someone else, typically used maliciously or to spread false information.

 

The IIA president cited a high-profile international case where a bank manager, convinced by a fake call that seemed to be from the bank’s president, transferred $35 million without verifying the request.

 

“We haven’t heard of any occurrences here in Barbados, but we believe that we need to provide opportunities for our folks to learn about this and how they can bolster the resilience of their organisations to resist this,” he said.

 

To combat these threats, Chadderton advised businesses to implement stronger security protocols, recommending that they put contingency measures in place and adopt multifactor verification processes.

 

“As an internal auditor, there’s a maxim that we have: trust, but verify,” he said. “Perhaps you may want to institute something like multifactor authentication into business operations. For example, if you receive an instruction by one method, confirm it through another,” the auditor said, adding that, “It won’t hurt to take an extra minute just to make sure it is that person.”

 

He also warned against seemingly harmless practices like long voicemail greetings, which could provide material for fraudsters to mimic voices.

 

“Fraudsters never sleep,” he said.

 

The Barbados chapter of IIA marked its silver anniversary on December 4, commemorating 25 years since its founding in 1999.

 

“We are so thankful for the progress that we have made. Admittedly, there is still quite a way to go, but we are not daunted,” Chadderton shared. “We certainly take every opportunity to use the platform we have to demonstrate the value that internal audit adds to businesses and organisations.”

 

As part of the anniversary celebrations, the Institute hosted its annual fraud conference on Thursday, which was rescheduled to coincide with International Fraud Awareness Week.

 

The conference, held at the Lloyd Erskine Sandiford Centre, featured renowned fraud expert Dr Kelly Richmond Pope as the principal presenter. Pope also exclusively screened her award-winning documentary, All the Queen’s Horses earlier in the week.

 

“This week, we have used the platform of International Fraud Awareness Week to bring awareness to fraud prevention, fraud detection, and fraud mitigation,” Chadderton said. “We seek to provide opportunities for our members and, by extension, those around us, to bolster the resilience of their organisations.”

 

In addition to fraud awareness, the IIA president highlighted its mission to support organisations in governance, risk management, and controls.

 

“We are here to help add value to our organisations, to show them that though we may be doing things well, how can we do things better?” Chadderton said.

shannamoore@barbadostoday.bb