Navigating Deepfakes: Ensuring Supplier Authenticity in AP Payments

Updated: February 5, 2024

In a startling instance of technological deception, CNN reports that a finance worker at a multinational corporation was defrauded of $25 million by scammers employing deepfake technology to impersonate the company's chief financial officer during a video conference call. The Hong Kong police unveiled this sophisticated scam, revealing that the fraud extended to fabricating multiple staff members in the call using deepfake technology, making it appear as though legitimate instructions were being given by familiar colleagues.

This manipulation led the employee to transfer approximately $25.6 million, under the belief that the directives were genuine. The scam is part of a worrying trend where fraudsters leverage deepfake technology to circumvent traditional security measures, including tricking facial recognition systems with fake identities, as highlighted by the misuse of stolen Hong Kong identity cards for fraudulent loan applications and bank account registrations.

This incident underscores the growing global concern over the use of deepfake technology for criminal activities, prompting a need for heightened vigilance and advanced security protocols. This is particularly relevant in the Accounts Payable (AP) space, where the authenticity of suppliers is paramount. As deepfake technology becomes increasingly sophisticated, it's crucial for businesses to ensure they truly know their suppliers.

Deepfake and Identity Theft: A Growing Concern

Deepfake technology uses artificial intelligence to create hyper-realistic but entirely fake audio and video content, making it increasingly difficult to distinguish between genuine and manipulated content. This technology can be exploited to commit identity theft, posing a significant risk to businesses.

In the AP space, deepfake technology can be used to impersonate suppliers, leading to fraudulent transactions. A fraudster could potentially use deepfake technology to mimic a supplier's voice, video, or even email style, tricking businesses into making payments to fraudulent accounts.

The Importance of Knowing Your Suppliers

In this environment, it's more important than ever for businesses to truly know their suppliers. This goes beyond just knowing the products or services a supplier provides; it involves understanding the supplier's communication patterns, verifying their identity, and regularly updating supplier information.

Businesses should be aware of any changes in supplier behavior. For example, if a supplier suddenly changes their bank account details or requests payment to a different account, this could be a red flag.

Implementing Robust Verification Processes

To combat the threat of deepfake and identity theft, businesses should implement robust verification processes. This could involve:

1. Thorough ID Verification:

Businesses should establish comprehensive document verification processes when proving a supplier's identity. This includes checking all security features in IDs and re-verifying the authenticity of documents.

2. Biometric Verification:

Implementing quick and robust liveness verification can prove that no malefactor is trying to present non-live imagery during checks. Biometric verification solutions should also match a person’s selfie with their ID portrait and any database an organization utilizes to ensure that the person is the same.

3. Cross-Validation:

Cross-validating supplier information with biometric checks and recent transaction checks can help ensure a thorough verification process.

Stay Vigilant

In the face of deepfake technology and the potential for identity theft, businesses must be vigilant. By truly knowing their suppliers and implementing robust verification processes, businesses can protect themselves and maintain the integrity of their AP operations. As technology continues to evolve, so too must our strategies for combating fraud and ensuring the authenticity of our suppliers.

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Interested in learning how organizations are leveraging AP Payments as a Service to proactively manage supplier verification, and prevent payments fraud? Click here to request time with one of Finexio's payments experts.