From Clorox to Casinos to Banks, Hacks Highlight Advantage of AI in Anti-Fraud Toolkits

Hack by hack, the fraudsters are getting bolder.

And for enterprises girding against the rising tide of disruption and ransomware, advanced technologies are integral parts of any line of defense.

A spate of attacks detailed over the last several days and weeks underscores the urgency to harness artificial intelligence (AI) and machine learning (ML).

In the latest example, Clorox disclosed Monday (Sept. 18) that a cyberattack led to disruption of the company’s operations and supply chain, impacting the production of household goods and cleaning supplies. And, as noted in a company filing with the Securities and Exchange Commission (SEC) Monday, the consumer packaged goods (CPG) giant said it detected “unauthorized activity” in some of its information technology systems last month.

Assessing the Outages

Although the attack has been blunted, Clorox said in the SEC filing that it “is repairing the infrastructure and is reintegrating the systems that were proactively taken offline. The company expects to begin the process of transitioning back to normal automated order processing the week of Sept. 25.” The company added that it “is still evaluating the extent of the financial and business impact. Due to the order processing delays and elevated level of product outages, the company now believes the impact will be material on Q1 financial results.”

Caesars Entertainment grappled with its own cyberattack during the summer months and paid a ransom of approximately $15 million to the hackers. Hackers allegedly employed a social engineering scheme by impersonating an employee and contacting the company’s IT help desk to change a password.

MGM Resorts has had to contend with its own breach.

As detailed in the PYMNTS Intelligence report “Fraud Losses From Impersonator Scam Double for Largest US Banks,” a PYMNTS and Hawk AI collaboration, banks offer a crystallization of how fraud is evolving and how new technologies are evolving simultaneously to meet the challenges of battling the bad actors.

The data showed that compared to 2022, 43% of financial institutions (FIs) have experienced increased levels of fraud. The average cost of fraud for FIs with assets of $5 billion or more also increased by 65%, from $2.3 million in 2022 to $3.8 million this year. Drill down a bit and 12% of fraudulent transactions are tied to scams, with bank tech support impersonation and IRS scams the most common attack vectors.

There’s recognition of the need to re-examine and beef up the back-office efforts to detect and head off the fraudsters before systems are breached — in effect, to take a proactive approach. The report found that 48% of FIs either are in the process of adding or will add new tech systems to combat fraud in the next year. Sixty-six percent of FIs use AI and ML technologies to combat various means of attack, a percentage that represents a 34% jump from last year.

FIs using AI or ML reported lower rates of the two most common scams. By way of example, 22% of FIs not using these technologies experienced bank tech-support impersonation scams, but 18% of those using these AI or ML faced the same scams.

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The post From Clorox to Casinos to Banks, Hacks Highlight Advantage of AI in Anti-Fraud Toolkits first appeared on PYMNTS.com.