Cybersecurity, a concept previously likened to insurance by many CFOs, remains increasingly important when businesses embrace new technology or platforms. With the cloud, businesses can access real-time data and collect more customer information. But the integrity of the processes that protect data has become paramount to any business operating in the modern technological landscape.
With new technologies like AI, for example, business leaders are scrambling to determine the fundamentals of these offerings and how they can best leverage them. But with more dependence on technology comes more exposure to hackers. New technologies with no oversight are just as attractive to scammers as they are to finance and business leaders.
According to new data from Kroll, which surveyed 400 global business leaders, AI’s greatest impact outside of automation and remedial duties may be within the cybersecurity realm. In the advisory firm's 2023 fraud and financial crime report, surveyors report that over half (56%) of business leaders use AI in their latest cybersecurity efforts.
Increased Crime and Spending
Hackers prowl for those expanding their tech stack without considering the cybersecurity implications. Data shows nearly 69% of business leaders believe financial crime will rise over the next 12 months.
“The survey results show that firms face a perfect storm as financial crime risks increase and get more complex,” said David Lewis, global head of anti-money laundering (AML) advisory for Kroll. “[Business leaders] are not fully confident in the effectiveness of their defenses and will undoubtedly rush to embrace technology to solve all their problems.”
AI-inspired products within the cybersecurity space, still early in their rollout, may become a hot commodity in the data protection community. According to findings, over two-thirds (67%) of business leaders plan on investing in new technologies within these areas.
Tools being integrated include fraud monitoring technology (91%), customer identification and verification databases (87%), and AML transaction monitoring (86%).
Customer onboarding, which can go overlooked when analyzing cybersecurity impacts, is a crucial point for AI's role in cybersecurity. Using AI to detect abnormalities in onboarding processes proactively means a breach can be halted before it begins. Proactive AI-inspired initiatives like it can help detect potential scammers.
Crypto and Blockchain Hesitancy
With the conversations around AI being hauntingly familiar to the hype and portrayed disruption of blockchain technology, business leaders still have vastly different assessments of the two pieces of technology from a risk perspective. Although blockchain technology promises the same things like automation, transparency, and sophistication, more than three-quarters (78%) of those surveyed said financial crime risks in cryptocurrency are a source of concern.
“In the face of this dynamically evolving landscape, the role of the compliance function remains more crucial than ever,” said Haydn Jones, Kroll’s global head of cryptocurrency and blockchain technology solutions. “As we look toward the future, the complex interplay between technologies of all types, geopolitics, and financial crime means specialist skills will be required to navigate a data-based future.”
Rapidly advancing technologies like blockchain and AI seem to be some of the biggest worries for law enforcement officials, too. According to data, nearly six in 10 (59%) business leaders believe they cause governments' struggles to counteract data thieves. As governments catch up, the burden of data protection falls to the executive teams in charge of balancing innovation with integrity.
Cybersecurity and ESG
Environmental, social, and corporate governance (ESG) standards, an area that CFOs have reported feeling pressure to comply with, also has cybersecurity hurdles. Largely reliant on data to source figures and create narratives that surveyors call “ESG stories,” these datasets, limited as they are, can go unprotected.
Green crimes, or ESG-related crimes that can overlap with cybersecurity due to their dependence on data, are new phenomena that Kroll warns are almost too new to develop formal strategies against.
According to U.S. business leaders in the survey, their data issues around ESG lie within the lack of data on ESG as a whole. Findings show 68% of U.S. business leaders cite limited data around their ESG issues, alongside another 64% who say lack of transparency and regulation is at fault.
Green crimes, or ESG-related crimes that can overlap with cybersecurity due to their dependence on data are new phenomena that Kroll warns are almost too new to develop formal strategies against. According to Kroll, business leaders should be aware of the signs ESG-related crimes are happening within their organizations.
ESG boards with no industry experience or significantly higher profit margins than normal in a sector may be signs that ESG is being used as a front for fraud, Kroll experts advise.